1	Pakistan Presentation by Chairman Board of Investment, Pakistan Pakistan Investment Forum, PARIS May 2, 2002
2	Contents: Page Pakistan in perspective 3 Pakistan’s Stock Market 5 Major foreign companies in Pakistan 6 Corporate Performance – ROE 8 Liberal Investment Policy 9 Pakistan’s Incentives Package 10 Investment Policy – Regional Perspective 11 Sources of FDI 12 Government Priorities 14 Pakistan’s Improving Investment Climate 15 Deregulation 16 Privatization 19 Priority Sectors 24 Oil, Gas & Minerals 26 I.T & Telecom 31 Power 34 Afghanistan Reconstruction 35 Why Pakistan 37
3	Pakistan in Perspective Area 796,000 Sq Km Population 140 M GDP US$ 65 B Sectoral Shares: Agriculture 25% Manufacturing 17% Services 50% Others 8% GDP growth 3% GDP/ Capita US$ 443 GDP/Capita PPP US$ 2,230 Inflation 2.8% Exchange rate Rs. 60= 1US$ Fixed Tel. lines 3% Cellular lines 0.7%
4	Pakistan in Perspective Revenues % GDP 11.3 Investment % GDP 15 Credit Rating B+ Workforce 41 Million Registered companies 43,000+ Listed Companies 700+ Foreign firms 600+ Industrial Estates/Zones 63 Export Processing Zones 3
5	Pakistan’s Stock Market Pakistan’s stock market among the best performing markets in terms of profitability Growth inflow of foreign funds in stock market Karachi Stock Exchange (KSE) Index: 03-07-01 22-04-02 Gain 1334 1885 551 Points (41%) Market capitalization: $ 7.20 billion
6	Major 300 foreign companies in Pakistan
7	Pakistan Home to 600 + Foreign Companies
8	Corporate Performance - ROE
9	Liberal Investment Policy All economic sectors open for FDI 100% foreign equity allowed No Government sanction required Attractive incentives package Remittance of Royalty, Technical & Franchise Fee; Capital, Profits, Dividends allowed Foreign investment fully protected: Foreign Private Investment (Promotion & Protection) Act, 1976 Protection of Economic Reforms Act, 1992 Foreign Currency Accounts (Protection) Ordinance, 2001 Bilateral Agreements: Investment Protection: 42 Countries Avoidance of Double Taxation: 51 Countries
10	Pakistan’s Incentives Package
11	Investment Policy - Regional Perspective
12	Sources of FDI (1990-2001)
13	Foreign Investment Shares by Sector
14	Government Priorities Economic revival: Deregulation/Privatization Priority Sectors:- üOil & Gas/Energy ü IT & Telecom üAgriculture ü Small & Medium Enterprises Good governance Poverty alleviation
15	Pakistan’s Improving Investment Climate Resolution of IPPs / Hubco Issues Successful Structural Reforms Privatization, Liberalization & Deregulation Monetary, Forex, Fiscal & Trade Policy Corporate & Capital Market Governance & Political Tax Administration & Tariff Homeland Security Initiatives Police Reforms Counter Terrorism Measures De weaponization Programme Changes in Economic Fundamentals Improved Trade & Current Account Balance Stable Exchange Rate Increased Foreign Exchange Reserves Lower Inflation Economic Sanctions Lifted Debt Reprofiled – substantial debt relief IMF – Poverty Reduction & Growth Facility Consistent economic policies Credit Rating B+
16	Deregulation Government controls are being removed for better economic development Investment in all economic sectors deregulated Investors free to choose projects / sectors Foreign investment allowed in all sectors No limit on project size Remittance of royalty, technical, franchise fees allowed Number of specified industries reduced from 23 to 4
17	Deregulation (Cont’d) Established independent regulators:- Securities Exchange Commission of Pakistan (SECP) Pakistan Telecommunication Authority (PTA) National Energy and Power Regulatory Authority (NEPRA) Oil & Gas Regulatory Authority (OGRA) Pakistan Electronic Media Regulatory Authority (PEMRA) Pakistan Procurement Regulatory Authority (PPRA) Imports of Furnace Oil and High Speed Diesel deregulated Prices & allocation of LPG deregulated
18	Ongoing Exercise on Deregulation (Cont’d) A Committee headed by Finance Minister constituted for formulating further recommendations to dismantle the regulations for the following Sectors:
19	Privatization Privatization Commission established in 1991 to: Privatize federal entities Follow open and transparent sale process A revitalized Privatization Program launched: Privatization Law 2000, to protect investors Prioritization of assets sales and diversified divestment strategies
20	Privatization Improving Enabling Framework: Restored investor confidence - resolving investor disputes Measures to ensure transparency Appointment of world renowned Consultants: ü JP Morgan ü Goldman Sacks üMerrill Lynch ü Price Water House Established independent regulatory bodies to clarify rules of the game and ensure a level playing field:- ü Power üOil and Gas ü Telecom Issued new rules and regulations, and established Ministry of Privatization Improved public understanding of privatization:- ü Seminars ü Interviews ü Publications ü Website
21	Transactions and Sale Proceeds
22	Oil & Gas
23	Power & Telecom
24	PRIORITY SECTORS Oil, gas & mining Information Technology & Telecom Energy (Hydel & coal) Agriculture Livestock & dairy Fisheries Horticulture Cool chains & grain storage SMEs Textiles (apparels & children clothing) Leather (footwear, garments, etc.) Engineering & Electronics Sports & surgical goods Gemstones & jewelry Tourism
25	PRIORITY SECTORS (Contd..) Infrastructure and related services Hydro-electric power generation Roads (highways, motorways) Railways Airports Ports & Port Handling activities Gas & Oil pipelines Urban Mass transit Storage facilities for agricultural produce Cool chains (for agro-business)
26	Oil & Gas Resources & Infrastructure Potential Discovered Produced Oil (Billion barrels) 27 0.74 0.44 Gas (Trillion Cubic feet) 282 38 14 Exploration of Oil & Gas First oil discovery 1915 Exploratory wells drilled 526 Discoveries 142 Success Rate 1 : 3.7 Existing foreign Cos (Oil & Gas) 24 (BHP, BP, OMV, Shell, Caltex, TOTAL etc.) Oil Refining Capacity (Mn.Tons/Year) Existing : 5 Refineries 11.28 Under Installation : 1 (Bosicor) 1.20 Proposed : 1 (Iran-Pak) 6.00
27	Oil/Gas/LPG Demand & Production
28	"Road Map to an efficient" Road Map to an efficient Oil & Gas Sector Liberalize Oil & Gas Sector Privatize Public Sector Entities Deregulate import & prices of oil Accelerate Gas Development Improved Governance Promote Foreign Investment
29	"Foreign Investment" Foreign Investment Investor friendly “Petroleum Policy” announced in May 2001 $ 1 Billion foreign investment committed since Oct, 1999:- % age Exploration 8% Gas Fields Dev. 55% Oil pipelines 31% Marketing 6%
30	Minerals and Coal Minerals Exploitation of proved mineral deposits: ü Coal ü Lead ü Zinc ü Copper ü Gold ü Iron ü Phosphate Gemstones Reserves (Million Carats) ü Emerald 70 ü Ruby 200 ü Topaz 10 Evaluation of identified prospects Generation of exploration targets Complete geological Map Geophysical Survey Geochemical Survey Coal Thar field is 5th Largest but un-exploited (175 billion tons) – Total reserves: 184 B.Tons Current Production: 3.5 million tones / year Coal good for: power generation, industrial, commercial and domestic use
31	I.T & Telecom
32	I.T & Telecom (Contd……) 100% foreign equity allowed in software houses Piracy laws to protect software Tax holiday on software exports till 2018. Duty-free imports of hardware & software products FYA (First Year Allowance) @ 90% of equipment cost Retaining of 35% earnings by software exporting companies in foreign currency
33	I.T & Telecom Development Cellular Phone Usage Jan 2001: 225,000 – Jan 2002: 850,000 Multiplied 400 % in last 10 months as compared to last 11 years Software Technology Parks Internationally competitive and highly subsidised rental rates The availability of different grades of office space to suit the varying needs of tenants Availability of bandwidth, utilities and administrative support Training of 25,000 people - last 12 months Medical & Legal transcriptions IT Law (digital signatures,e-commerce,Secure comm.) Task forces & synergies (Health, Agri, Call Centers, Women in IT, IT & Poverty Alleviation, Venture Capital etc.) Education (Virtual University, 7 IT Universities, IT faculty training, IT curriculum for class IX - onwards)
34	P O W E R
35	"Infrastructure" Infrastructure Telecom & Communication Exchanges, Transmission Links, Telephony / TV Airports Roads Housing & Shelter Bridges, Medium & Small Dams Water supply & Sanitation Transit Pipelines Trade Food Items (Wheat, Rice, Edible Oils) Clothing, blankets, beddings Healthcare, Pharmaceuticals, Surgical Goods & Hospital Equipment Educational & Training Material Housing & Construction Material (Cement, Furniture, Steel Items) Transport (Vehicles, Tractors & parts)
36	Afghanistan Reconstruction (Contd….) opportunities for business from Pakistan Agriculture & Industry Development of Agri Land Crop Substitution & Seed Distribution Forestry, Plant Protection, Livestock, Orchids & Farms Small Industries Services Sector Infrastructure Repair & De mining Immunisation, Hospitals & Healthcare Units Education & Training Currency Printing Repair & Vehicle Maintenance Facilities
37	Why Pakistan Strategic Location Emerging Regional Hub & Transit Access to Afghanistan/CARs/Gulf/SAARC Abundant Land & Natural Resources Low Production Costs Trained and Low Cost Manpower Export Processing Zones and Industrial Estates One Window Facilitation Friendly environment
38	Pakistan is open for business…..
39	THANK YOU
40	Project Briefs - SMEDA
41	Project Briefs – SMEDA (Contd)