January 27, 2006	Friday	Zilhaj 26, 1426

KARACHI, Jan 26: The majority of American Business Council (ABC) members have planned future investment in Pakistan in the next 12 months as they are optimistic about the overall business climate and domestic economy. Most of the members have reported growth in their revenue and profits.

This was stated by ABC President Zubyr I. Soomro in a press conference here on Thursday. Elaborating on the results of the current annual survey, conducted by the council based on members’ business perception, economic and business climate, he said as many as 67 per cent of the ABC members had plans to increase investment in Pakistan in 2005 as compared to 57 per cent in 2000.

Around 98 per cent of the ABC members were positive about the economy in 2005 as compared to 40 per cent in 2000.

The ABC president, however, did not give out specific figures of the future planned investment by the ABC members in the next one year. He also did not identify sectors where this investment is to be made.

Painting a rosy picture, he said that 85 per cent members were positive about the improvement in internal political situation in 2005 as compared to 38 per cent in 2000. Over 98 per cent were positive about the consistency in economic policies last year as against 48 per cent in 2000.

Implementation of policies received positive response from 89 per cent members whilst the State Bank received 100 per cent positive response from the members. Both the Securities and Exchange Commission of Pakistan and the Central Board of Revenue received 98 per cent response. Approximately 98 per cent of the members were positive about the income tax and 95 per cent about customs.

Mr Soomro said the ABC members expressed negative sentiments about the Export Promotion Bureau, ministry of industries, ministry of health and ministry of labour and manpower.

He said the members thought that law and order situation had improved but it was still not positive. He added that 66 per cent members felt that the law and order was positive in 2000 but in 2005 63 per cent members were positive about the situation. “Law and order is still an issue,” he added.

In sharp contrast to ABC members’ findings towards rising confidence of prospective investor — a souvenir of ABC presents a different picture. Out of total inflow of $1.5 billion foreign direct investment (FDI) in Pakistan in 2004-05, the share of US investment stands at $326 million. Surprisingly, in 2001-02, the US share of investment was also $326 million when total foreign direct investment was $485 million.

The share of US investors as percentage of the total FDI has actually declined over the last five years. Since 2001-02, the US investment has declined to $212 million in 2002-03 as against overall FDI of $798 million and to $238 million in 2003-04 when total FDI was $949 million. Hence, the total FDI in Pakistan continues to grow up but the US investment remained fluctuating during the last five years.

According to the souvenir, only two new US based companies had become member of the council, rising to 60 in 2004-05 as compared to 58 in 1999-2000. In 1985-85, the ABC had 35 members, rising to 53 in 1989-90 and to 61 in 1994-95. The ABC members operate in various industries i.e. healthcare, financial services, IT, engineering, chemicals and fertilizers, energy, food and beverage, oil and gas and other sectors.

The ABC members have cumulative revenues of about $2 billion and an investment of over $1 billion in Pakistan since 2001-02. Last year, the council members had paid Rs35 billion to the national kitty in terms of direct and indirect taxes. The members also employ 22,000 people directly who support 100,000 dependents and indirectly employ over half a million people with agents, distributors, etc.