Pakistan emerges magnet for international investors

dubai - Country will attract $150b worth of FDI alongside the implementation of the CPEC

Has Pakistan become a hot destination for foreign investors, companies, multi-national lenders and governments?

Yes. The offers, manifesting as direct investments, joint ventures and those related to the China Pakistan Economic Corridor (CPEC), confirm it. The interest for investing in Pakistan is coming from far and wide. It ranges from Germany to Japan, France to United States, Portugal to Italy and the United Kingdom, and the World Bank to the Asian Development Bank.

The reason: pro-business Prime Minister Nawaz Sharif's policies to overcome terrorism, shore up the economy, raise export volumes, create jobs, expand energy generation, build roads and motorways, expand technical education, use of computers and IT, provide excess to medical care and education on a vast scale, reduce external debt, build up foreign currency reserves and to build the country with hi-tech imports.

"Pakistan has turned into an international investment destination," said Minister of Planning and Development Ahsan Iqbal.

Miftah Ismail, Minister of State and chairman of the Board of Investment (BoI), said: "After all-round improvements in all sectors of the economy, Pakistan is now attractive to international investors. They can get large profits and high dividends from our stock market."

The BoI projects $150 billion worth of foreign investment coming to Pakistan alongside the implementation of the CPEC, in sectors ranging from energy to auto, high-tech industrial plants and machinery to consumer goods. This is in addition to $61 billion worth of direct investment into the CPEC itself. The actual pace of FDI inflows and the investments announced confirm BoI projections.

Dr Gerd Muller, German Federal Minister for Economic Cooperation and Development, recently led a team of German experts and investors to Islamabad to meet Sharif. The PM proposed formation of a bilateral chamber of commerce and investment to Muller. The German minister vowed to further strengthen cooperation with Pakistan in a number of fields.

An agreement under was signed under which German development bank KFW will participate in creating the Pakistan Microfinance Investment Company.

Pakistan and Germany also signed a joint declaration of intent which aims at strengthening "economic cooperation between the two countries, including governance, energy and sustainable economic development," Sharif said. The volume of funds for bilateral development cooperation between Germany and Pakistan will reach ?109 million in 2017 and 2018.

French and Pakistani enterprises recently identified agriculture, food processing, hydro-electric power, renewable energy, digitalisation, electronics, IT and LNG storage for bilateral investment in Pakistan.

Pakistan has immense potential to become the world's 20th largest economy by 2030, a delegation of British parliamentarians, led by Rehman Chishti, said. More than 100 British businesses are doing business in Pakistan, including well-known brands such as Standard Chartered, GlaxoSmithKline, Shell, Toni & Guy, Debenhams, Unilever, Tesco.

China stays ahead among foreign investors in Pakistan. It is illustrated by the Hub Power Company (Hubco) of Pakistan which entered into a joint venture with China International Holding (CPIH). A coal-based power plant which can generate 1,320mw electricity in Hubco district of Balochistan broke ground on April 10. It will supply power in the Gwadar Port region and projects under the CPEC.

Joao Paulo Sabido Costa, Charge d'affaires of Portugal to Pakistan, said in Islamabad: "Several trade and investment initiatives have been launched this year by the Pakistan-Portugal Business Council to boost economic activities between the two countries. There is an awakening in our key economic sectors regarding Pakistan's potential. Many business and investment opportunities, including those covered by the CPEC, have been identified for investment in Pakistan. A number of projects are going to be in the field of cork-based products, renewable energy and hydel power."

Manila-based Asian Development Bank has announced that it would provide $1 billion to work with China's lenders to jointly finance railway network and other projects of regional connectivity in Pakistan. The funds will be provided under multi-tranche financing facility for upgrading Mainline (M-1). China will provide $5.5 billion.

The World Bank has offered Pakistan its support to establish the Pakistan Infrastructure Bank (PIB). Patchamuthu Illangovan, World Bank country director for Pakistan, said: "Once established, the PIB will complement Pakistan government's initiative by enhancing private financing and investment for infrastructure projects in the country."

The writer is based in Islamabad. Views expressed are his own and do not reflect the newspaper's policy.