Pakistan is to renegotiate Agreements on Promotion and Protection of Investments (APPIs) with Australia and Egypt which are expected to help flow of investment from these countries, official sources told Business Recorder.
They said that during the second Joint Trade Committee meeting held in Commerce Ministry on February 16, 2010, Pakistan noted that Australian investment in Pakistan is moving forward across a range of sectors including insurance services, pharmaceuticals and oil and gas.
It was agreed during the meeting that the current APPI between Pakistan and Australia, signed in 1998, could be renegotiated to ensure best practices. Pakistan side also offered to table the draft text of the agreement for Australia's consideration to facilitate consideration of the proposal to renegotiate the APPI.
According to the Board of Investment (BoI), which is now working under the control of Prime Minister Secretariat, Australia's abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron ore, copper, gold, natural resources, uranium and renewable energy sources. The Australian economy grew for 17 consecutive years before global financial crisis. It has GDP of $1,069.3 billion (estimated for 2008) with per capita GDP of $50,150 and real GDP growth of 2.5 per cent.
The BoI further explained that APPI constitutes a reciprocal agreement between the two countries incorporating their expression of intent to protect and promote foreign investment and to establish thereto legally binding rights and obligations world-wide. The instrument is generally viewed as a means to gain investors' confidence.
The renegotiation of Pakistan-Australia APPI and its effective implementation would not only ensure the compatibility of its terms with best practices but would also be a step towards supporting larger inflow of Australian investments into Pakistan. Talking about Egypt, sources said that during third session of the Pak-Egypt Joint Commission meeting held in Cairo (Egypt) on May 22-24, 2010, the two countries agreed on the need to update the existing legal framework of bilateral co-operation on investment/APPI signed between the two countries in 2000.
The need to negotiate a new APPI, reflecting the desire to promote and protect investments between the two countries was also felt. It was also agreed that Board of Investment (BoI) of Pakistan would forward a new draft APPI to Egyptian authorities for consideration.
Egypt, occupying the north-east corner of the African continent, has aggressively pursued economic reforms to encourage inflows of foreign investment and facilitate GDP growth. In 2005, Egypt reduced personal and corporate tax rates, reduced energy subsidies and privatised several enterprises. It has a GDP of $444.8 billion (est 2008) with a per capita GDP of $5,800 (2008 est) and real GDP growth of 7.2 percent (est 2008). Sources said the Prime Minister in his capacity as Minister for BoI has approved the proposal.