1	Board of Investment Government of Pakistan The Investment Climate in Pakistan Business Opportunities along The New Business Frontier A Presentation by the Chairman, BOI March 22, 2001
2	Presentation Structure Key features of the Pakistan economy Global, regional, and Pakistan investment scoreboard Strengthening the business climate Addressing the investment impediments Macro reforms well underway Initiatives to strengthen private sector Business perceptions Pakistan’s investment package Pakistan’s investment package - Regional Perspective The remaining challenges Board of Investment - Capacity Building - Strategy for boosting investment - Visions & Mission Investment opportunities Pakistan’s Message
3	Key Features of the Pakistan Economy 1999-2000 Area: 796,095 sq.km. Population: 139 million, rural/urban balance of 71:29 GDP: US$ 64 billion in the formal sector GDP growth: 4.8% and recovering Inflation: 3.6% Fiscal revenues improving FDI - US$ 470 million, with great untapped potential Foreign firms welcome - 657 of them already 779 listed companies Exports: US$ 8.16 b. Imports: US$ 9.60 b.
4	Pakistan’s Economic Indicators
5	Global/Regional Investment Scoreboard Foreign Investment Inflows - 1999
6	Pakistan Investment Scoreboard (1990 – 2000)
7	Pakistan Investment Scoreboard Main Foreign Investors (1990 – 2000)
8	Foreign Investment Shares by Sector
9	Addressing the Investment Impediments Recent Progress
10	Macro Reforms Well Underway to Restore Business Confidence New trade and export promotion policies, with at least a three-year time horizon Strengthening of public sector governance and accountability Identification of Priority Sectors to bring policy consistency and focus: Information Technology Oil & Gas SMEs Agriculture Reforming the tariff and tax systems
11	Macro Reforms Well Underway to Restore Business Confidence (Cont’d) Introduction of “sector specific policies” to bring coherence and investment in established key sectors: Telecom Fertilizer Textiles Engineering
12	GOP initiatives to strengthen Private Sector Strong focus on developing Small and Medium Enterprises: SME operations established in all major banks Micro-Finance Bank established Introduction of aggressive fiscal reforms Growing focus on indirect taxes reduced taxation slabs and number of taxes CBR restructuring Capital Market Reforms: SECP involved in stock exchange risk management systems Restrictions on short selling Introduction of shorter clearing cycle and more sophisticated clearing system Non-member management of stock exchanges
13	GOP initiatives to strengthen Private Sector (Cont’d) A revitalized Privatization Program Privatization Law to protect investors Prioritization of asset sales and diversified divestment strategies Establishment/strengthening of independent regulators Securities and Exchange Commission of Pakistan Pakistan Telecommunications Authority National Energy and Power Regulatory Authority Gas Regulatory Authority Reduced interest rate environment Reduced National Savings Scheme rates Non Performing Loan recovery drive Institutional strengthening of BOI
14	Impact of GOP initiatives Large scale manufacture growth up by 5.3% during H1 FY2001 Net private sector credit demand up by Rs.80.6 billion during H1 FY2001 versus Rs.24.3 billion in H1 FY2000 Deterioration of credit portfolios of banks arrested through restructuring/ rescheduling of NPLs Improved GOP finances Tax revenues up 13.5% YoY Direct taxes up 16.4% YoY Sales tax up 35.9% YoY Exports up 9.6% YoY Focus on financing SMEs and agriculture sector Increased activity in IT and Oil & Gas exploration Improved corporate sector profitability
15	Business Perceptions of the Economy The American Business Council of Pakistan
16	Business Perceptions of the Reforms The American Business Council of Pakistan
17	Pakistan’s Competitive Investment Package
18	Pakistan’s Investment Policy: A Regional Perspective
19	The Remaining Challenges Reforming the Internal Environment Removing uncertainty, inconsistency & lack of coordination Reducing bureaucracy and red-tape Building financial markets Strengthening law and order combating smuggling improving labour laws Improving the legal framework for business intellectual property rights Increasing investment in education and human resources Enhancing quality of life
20	The Remaining Challenges Facing External Developments Rebuilding international investor interest Globalization of production processes, economic liberalization, and economic interdependence Rapid changes in technology, especially in the areas of telecommunications and information technology Pakistan cannot be left behind Greater needs for MNCs and host governments to work together to enhance competitiveness Greater opportunities for public-private interfaces and business cooperation - domestically and globally Tremendous opportunities for exports of products and services – especially to regional markets of the CARs, Middle East and SAARC.
21	BOI Institutional Strengthening Investment Promotion Diamond
22	The Strategy for Boosting Investment - 1 Chief Executive of Pakistan approved the strategy for boosting domestic and foreign investment on October 16, 2000 Institutional strengthening of BOI BOI Ordinance being submitted to Cabinet BOI’s restructuring underway Induction of private sector members on BOI’s Board Overseas Pakistanis are being appointed as Investment Counsellors Young professionals being inducted in BOI ADB Project on BOI’s capacity building – building the investment promotion diamond
23	The Strategy for Boosting Investment - 2 Greater participation of Provinces The Provincial Investment Committees have been revived with strong links to the BOI Two Industrial Estates in each Province identified for development as Model Estates Industrial clusters and parks being targeted Investment promotion and targeting Identify potential countries Identify investment opportunities and develop marketing materials Market the investment opportunities to selected investors Track the investors’ interests and concerns Facilitate the entry of investors into Pakistan
24	The Strategy for Boosting Investment - 3 Image Building Campaign Domestic/Provincial Investment Conferences Overseas Investment Conferences Interaction with foreign and local media Consultation process initiated with FPCCI, Local Chambers, Overseas Chambers, Foreign Missions, CBR and other government agencies/Ministries Development of promotional tools BOI website being completely revamped
25	Vision and Missions of the BOI BOI’s Vision – Promoting domestic and foreign investment to enhance Pakistan’s international competitiveness and contribute to economic and social development BOI’s Missions To implement Policy Simplify procedures to attract investment To promote investment for profits Promotion (proactive, cost effective and responsive) Facilitation (account executives to provide customized assistance to investors) To coordinate for success Build linkages amongst provinces, private & public investors and overseas missions
26	A Menu of Investment Opportunities along the New Business Frontier Value-added agro-industry Fruits & vegetables Livestock & dairy Fisheries Horticulture Supporting industries Textiles Garments Automotive Electrical & electronics Information technology & related services
27	A Menu of Investment Opportunities along the New Business Frontier (cont.) Tourism development Hotels and related facilities Marine complexes and beach resorts Mountain resorts in the northern areas Privatization A US$ 3 billion opportunity Banking, finance, insurance Oil and gas Power Telecommunications Aviation Industries A base for the emerging markets of the Central Asian Republics
28	The Major Privatization Opportunities Upcoming Transactions Prior to June 2003 Banking & Finance Allied Bank Ltd. Muslim Commercial Bank Habib Bank Ltd. United Bank Ltd. NIT/ICP National Bank of Pakistan Oil and Gas Interests in 18 oil/gas fields Pakistan Oilfields Ltd. Oil & Gas Dev. Corp. Pakistan Petroleum Ltd. Attock Refinery Ltd. Pakistan State Oil SNGPL/SSGC National Refinery Ltd. Insurance State Life Insurance Corp. Other insurance companies Industrial Units Range of activities Power Karachi Electric Supply Company One other distribution company One generation company Pakistan Tele-communications Co., Ltd. Pakistan International Airlines Corp.
29	Pakistan’s Message Pakistan is turning the corner with respect to the investment climate Positive signals on the macroeconomic front, and from business Investment impediments being removed Investment policy reforms implemented We know that there is much more to do, and we will maintain our watch on the reform agenda, but now we at the BOI have the opportunity to focus on: Building on Pakistan’s fundamental business strengths Networking with the private sector, the Provinces, and other government agencies Identifying, developing, and promoting investment opportunities and projects in Pakistan And we seek close cooperation and involvement with the domestic and international business community
30	In sum, we at the Board of Investment cordially invite you to visit us and explore the business potential of…. http://www.pakboi.gov.pk