Pakistan is amongst the important emerging economies of the region, with population of 180 million plus, ideal location for access to all the growing markets of the world, with liberal and investor friendly policies. The investment policy of Pakistan offers proactive facilitation, guarantees of equal treatment to both local and foreign investors, easy tariff structures and a liberal regime on repatriation of profits.
These strategies have borne results with a record inflow of Foreign Investment of US $23 billion during the last ten years. Pakistan in the recent past was no exception to global financial crisis coupled with domestic difficulties but the economy has shown resilience to the shocks and has maintained global and regional pattern and has performed better than some of neighbouring countries. The World Bank Report of 2013 confirms that Pakistan ranks ahead of Russia, Indonesia, Brazil, India and Philippines.
Pakistan though has the most liberal investment policy regime and offers public-private partnership frameworks in the entire South Asian region. Foreign investment in Pakistan is fully protected through Foreign Private Investment (Promotion & Protection) Act, 1976; and Protection of Economic Reforms Act, 1992.
BOI being fully conscious of global economic competitiveness has introduced the Special Economic Zones Act 2012 , which will allow to create industrial cluster with liberal incentives, infrastructure, investor facilitation services to enhance productivity and reduce cost of doing business for economic development and poverty reduction. The Law further envisages to reduce processes through SEZ in Pakistan. The main features of the SEZ Bill 2012 include:
It extends to the whole of Pakistan and override other laws (anything contrary);
-- It extends to the whole of Pakistan and override other laws (anything contrary);
-- All SEZ whether Public, Public-Private or Private-Private to be governed under this Act;
-- The Board of Approval (BOA) headed by the Prime Minister of Pakistan with the Minister for Finance as the Vice Chairman shall meet as frequently as required but not less than twice a year and decisions shall be taken by a majority of the total membership present and voting;
-- SEZs will have exemption from customs duties & taxes for all Capital Goods imported into Pakistan for the development, operations and maintenance of a SEZ;
-- Exemption from all taxes on income accruable in relation to the development and operations of the SEZ for a period of ten years, starting from the date of signing of the Development Agreement;
-- Zone Enterprises have exemption from custom duties etc on imports of Capital Goods; and
-- Exemption from taxes on income for a period of 10 years starting from the date the Development certifies that the Zone Enterprise has commenced commercial operations in the relevant SEZ.
Investment Attractions for D8 Investors:
Energy:
The current supply shortage in Pakistan has been estimated at 6,500MW (megawatts) with frequent electricity outages experienced country-wide in FY2011 whereas demand of electricity growing at over 10% per annum. 67% of Pakistan's electricity generation is tilted towards thermal power generation with power plants operating at a reduced capacity utilisation of 34% presenting opportunities for investment in plant machinery.
Agriculture/ Agro-based Industries:
Agriculture has been the main stay of Pakistan's economy with a contribution of 20.9% to GDP in FY2010-11. Total cropped area in 2008-09 was 23.68 million hectares.
Livestock sector contributed 11.5% to GDP in 2010-11. The value of livestock is 6.1% more than the combined value of major and minor crops. Poultry meat contributes 19% to the total meat production in the country. Pakistan earned US $964 million from leather exports and a meager USD188 million from meat exports.
Mineral Development:
Mineral potential of Pakistan though, recognised to be excellent is inadequately developed as its contribution to GNP in FY2011 stands at 4.8 billion in comparison to 4.1 billion in FY2010.
The Mining and Quarrying sector had a GNP total value worth USD 4.8 billion in FY2011. During FY 2011, the mining and quarrying sector has contributed 2.4% of GDP and has growth rate of 0.4% in comparison to 2.2% in FY 2010.
Transportation sector
Although the quality of roads generally improved in 2008 due to facilitation by National Highway Authority's (NHA) planned to invest USD5.36 billion in the sector. This plan benefited from a USD 900 million multi-tranche loan from the ADB. However, in FY2011 10% of roads were destroyed due to floods. The cargo business generated PKR 6.4 billion in 2010-11 as compared to PKR 4.98 billion in FY2009.
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