ISLAMABAD, July 17: The government is finalising a proposal to set up a special industrial zone (SIZ) for overseas Pakistanis at Lahore with an incentive of tax holiday. Informed sources told Dawn here on Tuesday said that the Punjab government would offer suitable land in the provincial capital to help establish the new SIZ aimed at attracting sizable investment by the expatriates.

All the hassle-free necessary infrastructure facilities are expected to be provided to the overseas Pakistanis through a one-window operation on the pattern of Dubai.

Sources said that the SIZ at Lahore was being finalised after a number of potential overseas Pakistanis assured to make new investment in Pakistan.

They had also expressed their willingness to separately invest in capital market, telecommunications, information technology, health, education, housing and agriculture sectors.

The issue of establishing SIZ at Lahore was initially discussed during a two-day international conference which was participated in by over 250 overseas Pakistanis on March 5-6 in Islamabad to help mobilise adequate Foreign Direct Investment (FDI) in the country.

At that time the government was also assured to have $3.3 billion new investment which included $300 million by 36 overseas Pakistanis living in Saudi Arabia, $1.1 billion by 55 expatriates living in the US, $84 million by 18 Pakistani investors living in the UAE and $935 million by 38 UK-based overseas Pakistanis.

Beside expatriates, a number of international investors had also attended the conference during which the government proposed new measures for further improving the regulatory environment aimed at increasing foreign investment in Pakistan.

The objective of the conference was to attract investment from middle and high income groups of overseas Pakistanis by highlighting the opportunities and incentives available in Pakistan.

Similarly, the objective was to provide overseas Pakistanis information regarding Pakistan's economic and regulatory environment.

The government, a source said, was providing a platform to overseas Pakistanis to inter-act with private sector and senior decision-makers.

“This is how the government plans to further strengthen our economy by attracting Pakistani Diaspora to invest in their country,” he said.

When contacted, the managing director of Overseas Pakistanis Foundation (OPF), Syed Nayyar Husnain Haider, confirmed that SIZ was expected to be set up at Lahore for which various formalities would soon be worked out with the Punjab government.

“In fact, this is an old proposal which is now being revived for the benefits of overseas Pakistanis,” he said.

Responding to a question, he said those overseas Pakistanis who were looking forward to invest in Pakistan, and wanted to do joint ventures with their Pakistani counterparts had good inter-action with Pakistani officials and the private sector during the international conference held in March this year. It was also attended by professionals residing in foreign countries.

The conference with the theme “opportunities that belong to you,” he said, had provided an opportunity to bring together all relevant stakeholders from public and private sectors and middle and high income overseas Pakistanis.

It also provided the overseas Pakistani entrepreneurs opportunities of investment of interaction with officials of the federal and provincial governments, as well as local businessmen for identifying areas of investment and for forming trade and joint venture partnership.

He said since overseas Pakistanis could play an effective role in further strengthening the country's economy by adequately investing in their country, the government would further consider offering them more incentives and concessions.

According to another senior official of the ministry of privatisation and investment, the government has received an all-time high over $6 billion foreign investment in 2006-07 against $3.9 billion of 2005-06.

He said over $6 billion foreign investment also included $2 billion portfolio investment, of which there were $1.5 billion GDR of OGDCL ($738 million) and UBL's ($565 million).

The private investment in the stock market also exceeded by the end of June 2007.

A 20 per cent foreign investment in the manufacturing sector, 11 per cent in the oil and gas exploration, 33 per cent in telecommunications, 21 per cent in financial business, three per cent in power and 10 per cent in other services was recorded.

He said 41 per cent foreign investment came from Europe which included 18 per cent from the Netherlands, 17 per cent from China, 16 per cent from US, 11 per cent from the Middle East, nine per cent from the UAE.

He dispelled the impression that major foreign investment was attracted from the Middle East.

Answering a question, he said that the biggest portfolio investment came from the US, followed by the UK (33 per cent) and Singapore (15 per cent).