09 November 2004	Tuesday	25 Ramazan 1425

ISLAMABAD, Nov 8: A 35-member Saudi business delegation is arriving here next week to discuss the possibility of investing $300 million to $500 million in Pakistan, particularly in the housing and construction sector, during 2004-05.

Sources told Dawn on Monday that the delegation was also expected to look into the possibility of investing in infrastructure projects in ports and shipping, information technology and the agro-based industry sectors.

The government is encouraging Saudi and United Arab Emirates investors to invest in low-cost housing to meet the shortage of houses.

The housing ministry is finalizing a plan to construct 500 flats at various places in the first phase.

"We are hoping to receive sizable investment from Saudi Arabia and the UAE during the current financial year and the Board of Investment has been directed to facilitate the investors from both the countries," said a finance ministry official.

He said it was difficult to give the exact size of the proposed investment but that could be more than $500 million.

He said Middle East-based investors were finding it difficult to invest in the United States and Europe due to various reasons and preferring to invest in countries like Pakistan.

"We are receiving queries regularly from prospective foreign investors and now we see an adequate foreign direct investment coming in this part of the world," the official said.

The government is projecting to attract $1 billion foreign direct investment during 2004-05 against the $950 million received during the last financial year.

The bulk of the investment came in the oil and gas, transport, communications and banking sectors and almost 85 per cent of that came from the US, the United Kingdom, Saudi Arabia, the UAE and Switzerland.

Since there has not been an adequate flow of foreign investment, the government has been facing criticism that it was particularly on account of political instability and bad law and order situation.

"Those are areas which need attention of the government," an official said.

He said foreign investors would continue to hesitate to invest in the present security situation in Pakistan.

However, he said, foreign investment had increased by over 15 per cent in 2003-04 as a result of inflows in the mining, quarrying, oil and gas, transport, communications and finance sectors.

He said foreign direct investment, being the largest component of private capital flows and a major factor in determining the gross domestic product, was desperately required to alleviate poverty and enhance the overall economic growth in the country.