Pakistan was a pro-investor country, where foreign investors could make high corporate earning while there was no restriction on taking their earnings out of the country, as the state interference in commercial activities has been minimised. State Bank of Pakistan Governor Dr Ishrat Husain gave these assurances to a German trade delegation, led by Heinrich O. E. Birr, which held a meeting with Punjab Industries Minister Muhammad Ajmal Cheema at the Punjab Industrial Estate Development and Management Company (PIE) office here on Sunday. PIE Chairman Mohsin Syed and other senior officials were also present on the occasion.
The governor in length highlighted the economic progress of the country and potential it has for foreign investors. He said that there was around 600 multinational companies operating in Pakistan and was getting high returns on their investments, while their investments were secure.
"Upper and middle of 15 million people, and growing, has the purchasing power capacity, they earn between $8000 and $10,000 per annum. Thus, foreign investors could tap this potential," he added.
According to him, the government was heavily investing in the country's infrastructure and many such projects have been initiated with public-private sectors joint partnership, with the aim of facilitating the business community. Involvement of private sector in all commercial activities, especially in public enterprises, has been the cornerstone of the government economic policies, and to reflect that sector like telecommunication and power has been opened to private sector.
The government believes that it should not run businesses, rather act as a monitoring institution. Dr Ishrat told the delegation that in the past five years, the government has managed to attain macroeconomics and political stability, which was foremost important for economic growth.
"The government has the set the economic growth target at 8 percent, which it was endeavouring to attain, while earning has increased and poverty has declined by 20 percent," he added.
He averred that in October 2004 the country's credit rating had increased, which was the fruit of the government reforms. Due to banking reforms, at present day the local banks were in a healthy position and 80 percent of its assets belonged to private sector, while they received a positive response after the floating bonds worth 500 million euros. "All these factors had improved the country's credit worthiness," he added.
While clearing the apprehension of a German delegate on political stability in the absence of President Pervez Musharraf and what happen if he was shot dead, he explained that political process was in place in the country that guarantees political stability, and the constitutional process would elect a new President, hence again political stability would remain intact.
"The al Qaida elements was the breed of unemployment, as financially strong organisations that were of extremist nature allure jobless frustrated youth. Thus, creation of jobs in the country would counter that phenomena," he added.
The governor maintained that the government was tackling the problem of power supply and in this connection it was privatising electricity distribution companies, which would improve power supply and losses that amounts to 25 percent.
"It was also planning to switch power generation houses from oil fuel to natural gas with the aim of making power cheap, while it was working on hydro-power for which it seeking private sector's assistance," he added.
He concluded that Pakistan was an investor-friendly country that provides a lot of opportunities for foreign investors, cheap labour was one aspect that could be capitalised by them. He accepted the fact that Pakistan image was not good in the international media, hence they were inviting foreign delegations to judge the country for themselves. With their firsthand experience of Pakistan, they would able to convince their shareholders to invest in the country.
Heinrich O. E. Birr said that Pakistan has gone through a tough time, but it has made significant progress, however Pakistan still needs to improve its image in the world.
He further said that their major shareholders need to be convinced to invest in Pakistan. "A high level German delegation would visit Pakistan next January, which would help in improving the image of the country," he added.
He applauded the Pakistani businessmen and the government open-minded approach to business that he did not found in India. He said that in India in they face bureaucratic hurdles, whereas in Pakistan it was easy to conduct business. Moreover, German investors were willing to invest huge amount in countries that gives solid returns and provides security, especially in the agriculture sector, he added.
Later, PIE Chairman Mohsin Syed gave a presentation on the Sundar Industrial Estate.