KARACHI, Dec 11: Prime Minister’s Adviser on Finance Shaukat Aziz said on Wednesday that foreigners’ traffic to Lahore and Islamabad had somewhat improved lately, but Karachi remained a problem city mainly because of a negative image.

Responding to a question in a businessmen meeting of Karachi Chamber of Commerce and Industry here, the adviser said the government was pursuing hard to erase a negative image of the country created by ‘no travel advices’ to Pakistan by some of the governments to their respective nationals.

“But there are many complications,” the adviser said. He made a specific reference to Karachi which according to his perception “is a far more secured city than many cities of South America and Africa.”

He urged the businessmen to utilize media services to create a positive image of their city. Karachi, he declared, is heart of Pakistan’s economy, a hub of industrial and commercial activities in the country.

He called Karachi a melting pot of all cultures of Pakistan as people from all parts of the country have made this city their home and are contributing towards the economic progress.

Responding to the points raised by KCCI president Shaukat Iqbal demanding certain tax concessions, the adviser expressed his displeasure and remarked: “I can share in private the taxes being paid by you individually.”

A lady participant asked the adviser to inform the audience how much tax is being collected from entire Punjab and how much is collected from Karachi. “It is no question of Karachi or Punjab,” he replied.

Mr Shaukat informed the audience of the improvement in tax collection, particularly in sales tax collected in domestic transactions which went up by 47 per cent while sales tax at import stage increased by 12pc. He said customs duty collection had also increased in the last five months.

Now that there is macroeconomic stability, foreign exchange reserves at $9 billion are a comfortable level, a stable exchange rate and inflation remains under control, Shaukat Aziz declared the government was planning to launch an investment mobilization drive from next month.

“We plan to dispatch a few investment teams during January and February comprising officials of Board of Investment and representatives of the private sector,” he replied, while answering an observation from a businessman who suggested that middle eastern investors who are now gradually withdrawing from the US and Europe can be convinced to invest their money in Pakistan.

“Investment and brotherhood are two different areas,” Shaukat Aziz told the businessmen, stating that an investor decides to put his money only if he is certain to get a return and that there was no element of uncertainty.

He expressed the hope that Pakistan was now a potential investment avenue after achieving macroeconomic stabilization, a comfortable level of foreign exchange reserves and a stable exchange rate.

He recalled his visit to Riyadh and UAE a few months ago during which he met investors and said that real estate, privatization, agri business, particularly livestock farming and dairy, I.T. and manufacturing are the areas where investment could come.

In last four months, he said, $404 million of direct foreign investment had poured in mainly in oil and gas. He expects one billion dollars foreign investment and a flow of more than 3 billion dollars remittances during the current fiscal year.

Shaukat Aziz said that textile machinery import was close to one billion dollars indicating a major revamping and restructuring of textile industry in Pakistan.

Answering a question, he said banks were never so liquid as they were now looking for borrowers. He disclosed that quite a few borrowers with sound track records are getting loans from banks on a single digit interest rate.

Banks have also given 700 to 800 million dollars loans to finance trade and business activities in the country.

Earlier, KCCI president Shaukat Iqbal in his address of welcome called unemployment and rampant poverty “basic problems” of the country. He spoke of the irritants of businessmen in getting tax refunds and other issues.