LAHORE, Oct 25: Prime Minister Shaukat Aziz on Monday said Pakistan had been accepted as an investor-friendly country where foreign entrepreneurs could invest their money without fear.

Mr Aziz made this claim at the ground breaking of a new $100 million motorcycle manufacturing plant of Honda Atlas some 25km from Lahore.

"The reforms and deregulation measures adopted by the government over the past few years to provide opportunities to investors - both from abroad and from within - have done much to create this atmosphere," the prime minister, who as the finance minister has overseen the economic reforms introduced in the country since 2000, said.

The prime minister also reiterated his commitment to carry on the economic policies and reforms, saying: "We do not believe in U-turns because this disrupts investment flows and creates market dislocation. The WTO framework allows us enough flexibility for our industry to grow and develop even further."

Mr Aziz said Pakistan should have more and more industry to avoid becoming just a market or consumer economy. "We should become production based economy so as more and more jobs could be created and foreign exchange earned. The government will provide an enabling environment for the industry to flourish and grow as we view Pakistan as a regional manufacturing hub covering South Asia, the Middle East, Africa and Central Asia. We are determined to build a better future for our people. We welcome all investors, both local and foreign, to join us on the journey to build a vibrant, growing and exciting Pakistan.

"Although we have still to make a lot of headway, our progress shows that we are moving in the right direction. Our government is spending substantially to provide an infrastructure to facilitate and help private sector investment," he said. He said the government was attempting to reduce the cost of production through a host of measures, and its goal was to adopt a new strategy to encourage rapid industrialization for creating more jobs in the country.

"The engineering industry, which is in the government's focus, comes in the forefront in this context, with the auto industry taking the lead as a hi-tech value added industry providing high skilled job opportunities. Since reduction of unemployment and eradication of poverty are the main priorities of the present government, the decision to focus public sector investment towards infrastructure will give a boost to growth and development."

Speaking about the achievements of the government on the economic front in the recent years, he said the economic policies and reforms had brought about a measure of stability and predictability by improving the macro-economic fundamentals, lowering interest rates, increasing trade and investment, reducing budget deficit and controlling inflation rate.

He said the financial sector had to become more dynamic in the presence of low interest rates. "Rather than just leading to the government, the focus of innovation has been the private sector and the consumer. In turn, this stance has unleashed unforeseen consumer purchasing power across the economy. The 50 per cent plus growth rates in consumer durables like TVs, refrigerators and motorcycles are evidence of the changing consumer behaviour," he said.

"As a consequence, the economy has shown signs of growth and resilience in the face of ever-increasing geo-political challenges. Obviously oil and commodity prices may cause inflationary pressures, but this is a global challenge rather than a Pakistan-specific one," Mr Aziz insisted.

He also gave details of the performance of the economy during the year 2003-04, saying nearly all the sectors had contributed to growth. He was hopeful that large-scale manufacturing, services, agriculture and other sectors of the economy would perform better this year than last year because of the government's consistent economic policies.

Mr Aziz also promised to launch industrial parks all over the country operated as public-private partnerships to provide a hassle-free investment environment and to continue reducing tariffs for raw materials to ensure competitiveness of local manufacturers. He said the government would do its level best to ensure availability of low cost credit to stimulate demand and investment as well as to improve human resource to close the skill gaps.

Honda Atlas CEO/chairman Saquib Shirazi greeted the prime minister, saying the number of motorcycles expected to be sold this financial year would go up 500,000 units from 100,000 units in 2001-02. Similarly, he said, the auto industry would produce about 125,000 cars this fiscal against 45,000 units or so four years ago. "This reflected the kind of progress the country's auto industry has been making in the recent years."

He also urged the government to ensure continuation of the economic policies to sustain the growth in the auto sector and protect the industry from any unfair competition that the WTO regime or the proposed Safta agreement could unleash.