Infrastructure development: Pakistan invites Bahrain to invest in Gwadar, energy

Suggests investors can join hands with Chinese to search for opportunities.

ISLAMABAD:

Pakistan has offered Bahrain an opportunity to invest in Gwadar Port and its energy and mining sectors, encouraging the Gulf monarchy to take advantage of the liberalised investment regime that in return will help Islamabad attract capital to boost its flagging economy.

“Bahrain has expertise in oil and infrastructure projects and Gwadar Port and the energy sector may be attractive for the Gulf country,” said Dr Musaddaq Malik, Special Assistant to the Prime Minister.

He was speaking at the Bahrain-Pakistan Business Forum, held on Wednesday to mark the current visit of King of Bahrain Hamad bin Isa Al Khalifa to Islamabad.

As many as 17 memoranda of understanding were signed between Pakistan and Bahrain and between Bahraini government and Pakistani investors. The agreements were aimed at venturing into new areas and expanding existing facilities set up in Bahrain by Pakistani investors.

Malik pointed out that China would invest $33 billion over five years in Pakistan, of which $18 billion would be pumped into infrastructure projects. He suggested that Bahraini investors should become equity partners of China to explore the opportunities.

He told the investors that they could also set up power plants in Pakistan – an area where the country offered a minimum 17% guaranteed rate of return with sovereign guarantees. In return, Pakistan can provide human capital and invest in the food sector, the areas where Bahrain is in need of external help.

Trade between the two countries stood at just $250 million per annum while in the last six years Bahrain invested only $18.7 million in Pakistan, said Miftah Ismail, Chairman Board of Investment, at the conference.

Ismail asked Bahraini investors to invest in Thar coal and copper and gold mines in Balochistan. The kind of technology and financial resources required to discover coal, gold and copper were missing in Pakistan, leaving the mines unexplored, he said.

The value of Thar coal is estimated at $9 trillion while the size of Pakistan’s economy is only $250 billion. Similarly, he said, copper mines were spread over 30,000 square kilometres and contribution of the mining sector to the economy was less than half a percentage point, 0.4% of GDP to be precise.

Ismail was of the view Bahrainis were more interested in the banking sector and equity market while other sectors of interest could be healthcare, education, food, textile, manufacturing, information and communications technology, industrial, professional and commercial services.

A lot more needed to be done to improve the dismal figures of bilateral trade, suggested Dr Hassan Fakhro, Bahrain’s Minister of Industries and Commerce while speaking at the conference.

He asked Pakistan’s business community to invest in the food sector that offered them immense opportunities.

Commerce Minister Khurram Dastgir offered Bahrain an opportunity to invest in the textile sector in order to get advantage of the 10-year duty-free access to European markets. In the same manner, Pakistan could also benefit from the free trade agreement between Bahrain and the US by establishing industrial units in the Gulf state.

Published in The Express Tribune, March 20^th, 2014.

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