LAHORE: Pakistan will have to ‘insulate’ foreign investors from the jurisdiction of its state institutions, courts and laws to give them a ‘sense of security’ in order to attract fresh direct foreign investment (FDI), says Board of Investment (BoI) Chairman Haroon Sharif.

“We need to develop an ‘island’ for foreign investors… on the pattern of Dubai International Financial Centre where the country’s laws do not apply,” Sharif told Dawn on Monday, hours before leaving with Prime Minister Imran Khan for the Malaysian tour.

It (the island) should have transparent, strict and independent rules of business (for facilitating and regulating foreign firms), but it will have to be totally insulated from authority and reach of the state agencies and laws so that investors can work with peace of mind, he asserted.

“It will be difficult to bring new investment into the country if we do not move in this direction,” the chairman, who has worked for the World Bank and several other international organisations, argued, admitting the implementation of this idea will require new legislation.

Sharif claimed that companies from two Gulf countries –– Saudi Arabia and United Arab Emirates –– have shown keen ‘interest’ in investing in energy, housing, water desalination, ports and shipping projects worth $20-30 billion in Pakistan. “They (Saudis and Emiratis) have promised investment more or less equal to the China-Pakistan Economic Corridor commitments.”

Both Saudi and Emirati companies have made significant investments in different sectors of Pakistan’s economy, including telecommunication, banking, chemicals, etc in the 2000s, but now have slowed down to just a fraction of the total foreign direct investment of $600 million received by the country during 1QFY19.

“They have cash and want to invest in the region for economic and strategic reasons while Pakistan offers higher returns (than any other regional economy). It will be a big success even if we are able to materialise projects worth $10bn in the next five years,” Sharif said.

“We will have to put our act together for this to happen,” he added, asserting the country’s bureaucracy didn’t have the kind of expertise and capacity required to deal with foreign investors and help execute projects. “We need to develop a pool of experts who can develop project feasibilities, and communicate with investors and bankers in their language even if it means paying them high salaries for their work.”

Published in Dawn, November 20th, 2018