Pakistan and the United States have decided to restart stalled negotiations on the Bilateral Investment Treaty (BIT), with Finance Minister Ishaq Dar saying that the government was ready to discuss all outstanding issues “with an open mind”.
“We are taking forward the process from where it was left off,” said Dar following his meeting with visiting President of Overseas Private Investment Corporation (OPIC) Elizabeth Littlefield and senior US Embassy officials on Tuesday.
However, he refused to give any timeline for a future agreement on the BIT. A number of areas were still pending further discussion, he said.
Pakistan is keen to sign the treaty, aimed at attracting US investment, but negotiations have been going on since 2005, without any tangible results, say Board of Investment officials.
During the last government, both countries had reached the final stages of negotiations on the BIT before the process was stalled by the Strategic Plans Division (SDP). The then chairman of the Board of Investment, Saleem Mandviwalla, had revealed at that time that the SPD had expressed serious reservations over the security of the country’s nuclear and defence programme if it were opened to foreign investment.
According to a draft of the treaty, Pakistan was willing to allow foreign investment in all sectors, including defence and nuclear technology. There was to be no restriction on foreign nationals serving in executive positions in firms, irrespective of the sector they are involved in.
The United States is also seeking clauses in the treaty which would resolve all disputes in accordance with US laws and provide protection to US companies that have invested from a third country of origin.
In addition to the above, the Americans are also seeking clauses which will allow them to be notified of any changes in investment policies, prior to their approval by Pakistan’s parliament.
While Dar said that no thorny issues were discussed in Tuesday’s meeting, it is known that the negotiations have been stalled due to Pakistan’s concerns over security clauses inserted in the draft treaty, besides other matters.
The other lens
Addressing the press conference, Littlefield said that cumulative investments through OPIC into Pakistan had increased from $80 million to $300 million, witnessing a manifold increase during the past couple of years.
Expressing optimism that the new government would overcome challenges facing the country, Littlefield said investments in energy and education sectors were essential for Pakistan’s progress.
Voicing her country’s desire to enhance bilateral cooperation in power generation through wind and bio-gas, she said American companies are already involved in development of Pakistan’s energy sector, with General Electric running a 50 megawatt electricity project in Sindh.
Later on, while speaking to the business community Littlefield said the investors were nervous about security, governance and energy issues but nevertheless were optimistic in tapping a market of 200 million people.
She said governance was the biggest challenge hindering investment to Pakistan, adding that the new chairman of the Board of Investment had assured her reduction in the red-tape culture.
Littlefield seemed upbeat about an improvement in governance in Pakistan after the change of government saying that “there is an uptick in optimism but I would still not call it an upsurge.”
Published in The Express Tribune, July 17th, 2013.