1	Board of Investment Government of Pakistan The Investment Climate in Pakistan Business Opportunities along The New Business Frontier A Presentation by the Director General (Policy & Planning), BOI February 26, 2001
2	Presentation Structure Key features of the Pakistan economy Global, regional, and Pakistan investment scoreboard Pakistan’s business strengths Strengthening the business climate Addressing the investment impediments Macro reforms well underway Business perceptions Investment and immigration policies being continuously improved Pakistan’s investment package The remaining challenges Board of Investment - Present Structure - Capacity Building - Strategy for boosting investment - Visions & Mission - Major facilitation services 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	Global FDI Inflows by Region 1990-2000 (estimated)
7	Pakistan Investment Scoreboard (1990 – 2000)
8	Pakistan Investment Scoreboard Main Foreign Investors (1990 – 2000)
9	Foreign Investment Shares by Sector
10	Pakistan’s Business Strengths Abundant Land and Natural Resources Extensive agricultural land Crop production (wheat, cotton, rice, fruits, vegetables) Mineral reserves (coal, crude oil, natural gas, copper, iron ore, gypsum, etc.) Fisheries and livestock production Strong Human Resources English speaking work force Arabic also widely understood Cost-effective managerial and technical workers Large & Growing Domestic Market 140 million consumers with growing incomes A growing middle-class moving to sophisticated consumption habits
11	Pakistan’s Business Strengths (cont) Well-Established Infrastructure and Legal Systems Comprehensive road, rail, air and sea links Good quality telecommunications and IT services Modern company law Long-standing corporate culture Strategic Location as a Regional Hub Principal gateway to the Central Asian Republics Strong and long-standing links with the Middle East and South Asia Comprehensive duty-free facilities for investors Continuing trends to liberalization, deregulation and privatization – a truly market-oriented and business-friendly approach
12	Pakistan’s Strengths
13	Addressing the Investment Impediments Recent Progress
14	Macro Reforms Well Underway to Restore Business Confidence New trade and export promotion policies, with at least a three-year time horizon Ambitious privatization program Strengthening of public sector governance and accountability Reforming the tariff and tax systems
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 Investment Policies: Consistent Trends Liberalization De-regulation Privatization Commitment to market-led economy, pursuing open trade and investment policies Strong and effective BOI coordinating with the Federal & Provincial authorities, and overseas missions to proactively market Pakistan as a competitive place to do business
18	Investment Policy Reforms of December 2000 The entire services sector has been opened for FDI Minimum foreign equity for non-manufacturing sectors reduced from $0.5 mn. to $0.3 mn. The relaxing of restrictions on remittances of franchise, royalty and technical fees for non-manufacturing enterprises The addition of a number of key industries to the value-added list Chemicals, textiles, iron & steel, engineering, pharmaceuticals, ceramics, mining The granting of industry status to tourism, housing, and construction industries
19	Improvements in Immigration Policies Business visas Multiple entry visa for three years can be issued by Pakistan missions abroad 30 days Landing Permit upon arrival at the airport Work visas Special Committee set up in the Board of Investment, with a maximum processing time of one month Registration of foreigners with the police Foreigners exempted from police registration
20	Pakistan’s Competitive Investment Package
21	Pakistan’s Investment Policy - Regional Perspective
22	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
23	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.
24	Present Structure of BOI
25	Capacity Building at the BOI: Key Goal Develop an Organizational plan that places the BOI: as a dynamic investment promotion agency to meet the challenges of the 21st century at the forefront of public sector management in Pakistan leading facilitator in the region
26	BOI Institutional Strengthening Investment Promotion Diamond
27	Key Features of BOI’s Capacity-Building Project Road Map: study of laws, rules, procedures that investors have to comply Database and interactive website: for investors, government departments, embassies, with hot links into other investor-relevant web sites Effective Partnerships: with provinces, ministries, private sector and trade bodies Investor Targeting Strategy: investment promotion and image building activities Develop a Service-oriented organization culture
28	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
29	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: Traditional investors - USA, UK, Japan Islamic countries - Saudi Arabia, UAE, Libya, Lebanon New directions - China, Malaysia, Korea 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
30	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
31	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
32	Major Facilitation Services of the BOI Access to investor information – especially through a major revamp and development of the BOI’s web site: www.pakboi.gov.pk Identification of investment opportunities Investor matchmaking services Support in obtaining required licenses and other interactions with government agencies Assistance in overcoming operational constraints after project has started up
33	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
34	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
35	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.
36	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
37	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
38	THANK YOU