Turkey has decided to invest one billion dollars in Pakistan’s communication, textile and automotive sectors during the next three years, according to Turgat Bayan, founder of the Pak-Turk Business Council.
According to the Board of Investment (BOI), Bayan informed the newly appointed Chairman Board of Investment Mohammad Zubair about the incoming investments from Turkey. Turkey has previously invested $370 million in direct investments in Pakistan.
The news is seen as a significant development that may boost dwindling investments long affected by red tape, a fact the PML-N government is trying to change. For the current year, the government has set an ambitious target of $ 2 billion in investment, more than double the investment that came in the last fiscal year. The Turkish investment, which matures in three years, will help increase an extremely low investment to GDP ratio that has plunged to historical lows.
“The country desperately needs to attract financial inflows to build up its dwindling foreign exchange reserves,” said Zubair, who was appointed the BOI chairman for five years by the PML-N government last week. Zubair previously served as the CFO of the American Multinational IBM for 25 years.
Turkey has also applied for the license of the Turkish TV channel Samanyolu in Pakistan that will broadcast Urdu and Turkish content simultaneously, according to Bayan.
Zubair also said that Turkey was interested in the hydropower and alternate energy projects in Pakistan and wanted to support the government to overcome the energy crisis
In the education sector, Turkey and Pakistan have been exchanging students in higher education. 23 Pak-Turk schools are also operating in Pakistan to promote Turkish language and culture in order to build cultural and economic linkages between the two countries.
Looking Further West
According to the BOI, Zubair is now trying to kick start the stalled negotiations on the Pak-US Bilateral Investment Treaty (BIT), which has been pending for over eight years. Both governments came close to signing a deal late last year but talks derailed after Pakistan’s security establishment expressed concerns over US investments in some sensitive sectors.
The US Ambassador to Pakistan Richard Olson has recently stated that Washington was waiting for a response from the Pakistani side on proposals forwarded to Islamabad.
Zubair will hold a meeting on Tuesday with Elizabeth Littlefiled, president and chief executive officer of Overseas Private Investment Corporation (OPIC), an American investment arm, to review the possibilities of US investment in Pakistan’s private sector. Though the meeting will primarily be centered on a better understanding of the investment climate in Pakistan, BOI officials have said the BIT issue could also be discussed.
OPIC has a $1 billion credit line set aside for energy projects in Pakistan. The BOI has singled out the Mahl Hydropower Project, 80 MW Neckeherdim – Paur Hydropower Project and 58 MW Turtonas – Uzghor Hydropower Project as open to OPIC investment.
Published in The Express Tribune, July 16th, 2013.
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