The Strategic Planning Division (SPD) of Pakistan has expressed concerns over the security of the country’s missile and nuclear programmes, if opened to foreign investment, but the issue has been addressed in a draft of the Pak-US Bilateral Investment Treaty (BIT), said the country’s top negotiator.
“The SPD had concerns that the sovereignty of the country should not be compromised and this issue has been taken care of through the insertion of a clause in the treaty which deals with essential security,” said Chairman Board of Investment (BOI) and chief negotiator from Pakistan Saleem Mandviwalla during a briefing on Thursday on the outcomes of Pak-US talks held to finalise the much-delayed treaty.
According to a draft of the treaty under negotiation, Pakistan is willing to allow foreign investment in all sectors, including defense and nuclear technology. There is also no restriction on foreign nationals serving in executive positions in firms, irrespective of the sector they are involved in.
Foreign investment in defense
China and France have already invested in Pakistan’s defense and Islamabad also “welcomes US investment in the same,” Mandviwalla said.
He added though that permission will be required for investment in arms and ammunition and nuclear programmes.
Although these sectors are not excluded from investment, Pakistan will exercise its right to deny investment through non-conforming measures (NCMs), he said. NCMs are standards and laws that each country has to observe for bringing in any investment, he said.
Mandviwalla said that talks on the text of the treaty have concluded but the NCMs have not yet been agreed upon. They will not be part of the main text but will be annexure with the treaty, he said.
The chairman also highlighted the article of the treaty which deals with security concerns.
According to Article 18, “nothing in this treaty shall be construed (1) to require a party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests or (2) to preclude a party from applying measures that it considers necessary for the fulfillment of its obligations with respect to the maintenance of restoration of international peace or security.”
This article is not unique to Pakistan, as article 18 is a standard clause in every treaty that the US has signed with other nations.
On foreign executives, the BOI chief said that foreign nationals can be appointed to senior management positions by the US firms, but insisted that their clearance will have to be obtained from security agencies.
“Pakistan’s security agencies have nothing concrete to establish they really have any concern while reviewing clearance applications of foreign executives,” he said.
Mandviwalla said that the issues related to paid-up capital for opening bank branches and companies’ registration fees in Pakistan were also resolved.
He added that the BOI will soon send the summary to the Cabinet for approval of the treaty.
Unlike Pakistan, the US has stated that the talks have not concluded as certain issues still remain unresolved.
Published in The Express Tribune, August 31st, 2012.