KARACHI, Jan 10: "Pakistan is back on our agenda," says a German corporate executive on a brief familarization visit to Pakistan. "We see stability. We are looking for long-term investment. We are open to anything," Dr Andreas Otto , a senior member executive board, Lufthansa Cargo AG, told representatives of German firms at the Pakistan-German Business Forum (PGBF) here. He is on a tour of the region to assess business outlook for his company.

His remarks came in the background of positive developments in recent weeks that have eased region's tensions and improved the investment environment. His observations were supported by a German consulate official present at the PGBF meeting.

Consul and deputy head of the German mission in Karachi Helmet Holzheuer informed his hosts that the visa restrictions had been eased "two steps" and fresh travel advisory to the Germans visiting Pakistan had taken care of the improved situation. The travel warning is for selected border areas, including the line of control in Kashmir. The number of visa applications have also increased.

The airline officials' visit is seen by local business as well-timed. They are here to familiarize themselves with official economic policies, to interact with local corporate executives and to assess the environment for starting business on a long-term basis, says PGBF president Razak Bengali.

In the discussions at PGBF, it was reiterated that Pakistan had acquired stability and was pursuing an "investment-friendly policy".

With the change in economic scenario, Razak Bengali is planning to invite a high-level delegation of prospective German investors to Pakistan. In the past, the Forum had led two delegations to Germany to familiarize Germans with the investment environment in this country. The PGBF is in touch with its German counterpart.

A DIHK delegation would visit Pakistan in the second week of January to enter into an arrangement with the PGBF for strengthening the institution and also for training the PGBF officials.

Managing director of BASF Pakistan, Qazi Sajid Ali, informed the visitors that his company as well as some multinationals wereconsidering investing and expanding their operations.

Business confidence is growing for a variety of reasons. Foreigners look for business in a fast growing economy as is evident from massive investments in China. Pakistan achieved a growth rate of 5.1 per cent last fiscal and is poised to hit a target of 5.3-5.4 this year. Corporate profits have soared with low interest rates, refinancing and stable exchange rate providing cheaper imports for industrial inputs.

An encouraging news for the business has been the privatization of Habib Bank, one of the largest commercial bank, described by officials as "a jewel in the crown". Last fiscal, the UBL was sold. After HBL's privatization, 80 per cent of the banking will be in the private sector.

So far, major investments in the financial sector are coming from the Aga Khan, Arab investors and their Pakistani associates. Multinationals operating here have strengthened their running businesses. Foreign oil marketing companies have expanded their network. Capital spending by foreign firms has primarily been in oil drilling and exploration and by locals in textiles.

Political stability has been strengthened with the 17th constitutional amendment, an outcome of an agreement between the MMA and the ruling party, coinciding with easing of tensions with India. The trend has been further strengthened by positive outcome of the Saarc summit, the Safta agreement and the progress on the composite dialogue with India.

The MMA-PML(Q) agreement is seen as part of a continuing political process that started with October 2002 elections. President Musharraf has also committed to becoming a civilian president before the end of this year. The agreement appears to have dispelled any lurking fear of a political breakdown, witnessed in the past in transition from military to constitutional and civilian rule.