Pakistan has provided more investors-friendly investment promotion policy packages compared to other emerging economies such as India, Indonesia, Malaysia, Thailand, China and Brazil, but sometime inconsistencies in these policies are observed, Daisuke Hiratuska, Executive Vice President, Japan External Trade Organisation (JETRO), and head of Japanese delegation and Kaoru Shiraishi, JETRO's Country Director in Pakistan said in a joint press briefing.
Pakistan has taken a lead in providing up to 50 percent depreciation to foreign investors during first year of their investment. In other countries of the world, this ratio is in between 20 to 25 percent, Daisuke Hiratuska explained. The visit of the business and investment delegation has been organised by the Embassy of Japan, Consulate-General of Japan in Karachi and the Japan External Trade Organisation (JETRO). It aims to provide Japanese business people interested in doing business in Pakistan with a chance to gain first hand knowledge of the actual situation in the country. The delegation consists of representatives from Japanese companies in a wide range of sectors, including mining, manufacturing, trading and banking.
The high level Japanese business delegation visiting Islamabad was welcomed at a luncheon hosted by President Asif Ali Zardari on Tuesday. The delegation also had a meeting with senior officials from the Ministry of Commerce and the Board of Investment and other relevant authorities to learn about trade policy and the government incentives for foreign business and investment.
Daisuke Hiratuska said that most of the delegation members were visiting Pakistan for the first time to see the business environments in Pakistan with their eyes. "We are here to change the perception about Pakistan created by mass media that Pakistan is a dangerous place," he added. He commented, "The one of the low level economic relations between the two countries is the long geographical distance between Japan and Pakistan. The geographical distance is crucial because it increases transportation costs and then reduces profit."
He said that Japanese affiliates have huge production and market bases in Singapore, Thailand and other Asia economies, but in those countries, the congestion cost becomes bigger and bigger. As a result, their economic bases in Asia have been relatively expanding a shift from East to West, already extending to India and Bangladesh, he added.
He said the Japanese delegation was convinced that the Pakistan's policy was enough liberal and attractive to invite investments from Japan. However, three tasks to be challenges. The first is the consistent industrial policy, the second is the improvement of hard and soft infrastructure, and the third is, peace and stability.
To a question, Kaoru Shiraishi replied that Government of Sindh had allocated 2000 acre of land in special economic zone to Japanese companies, but it needed to be developed and there was no progress in this direction. He said the bilateral trade between Pakistan and Japan stood $1.7 billion last year, whereas, the Foreign Direct Investment from Japan was $3.2 million.