ISLAMABAD, Feb 28: President Gen Pervez Musharraf has ordered a thorough shakeup in the departmental procedures after being told that some $55 billion brought into Pakistan in foreign investment over the years got stuck in red tape.
Informed sources told Dawn here on Tuesday that the president took a serious notice of the bottlenecks and hurdles created by the bureaucracy and had directed officials of the ministry of commerce, Central Board of Revenue (CBR) and the Board of Investment (BoI) to urgently streamline procedures for a smooth flow of foreign investment.
A decision had been taken to amend all the existing laws, rules and procedures to facilitate the Foreign Direct Investment (FDI) in the country. “The president is concerned over the low FDI in Pakistan compared to other countries especially the neighbouring states. He wants action and a report over the issue immediately”, a source said.
He also said that the CBR had been asked by the president and the prime minister to introduce “market determined tariffs” for foreign investors.
When contacted State Minister for Investment and BoI’s new chairman Omar Ahmad Ghumman confirmed that the president took a very serious view of $55 billion foreign investment that got stuck over the years. The president, he said, was now personally assuring the foreign investors that they would be provided a one window operation to help set up their businesses in Pakistan.
“We have been asked by the president and the prime minister to come up with new investment policy by March 30 with a view to remove the existing bottlenecks and hurdles in the way of foreign investment”, Ghumman said.
“We are revamping the entire investment policy. We require periodic upgrdation of our investment policy especially to compete with the neighbouring countries,” he said.
The new policy, he said, was being finalized with the support of all the stakeholders including the concerned federal and provincial ministries.
As a first step, he pointed out, a decision had been taken to set up a “Land Bank” to offer immediate and inexpensive land to the investors to help set up their industries. In this regard, the BoI had established contacts with the provincial governments to acquire land to be offered to the investors. This land, he said, was one of the biggest issues, causing numerous problems to the foreign investors.
Responding to a question, the state minister said that China had shown its interest to make substantial investment in power generation, oil and gas, housing, hotels and infrastructure projects.
“About power generation we have just concluded negotiations with several Chinese companies planning to invest in 960-mw Neelum Jhelum hydro project worth $1.7 billion”, he said.
The Bonji Company of China, he said, wanted to build a run of the river 7,500 MW hydro project. Similarly, a couple of Chinese companies had indicated to invest in Thar Coal project for which some American and European companies were also interested.
“Then we have finalized a $4 billion oil refinery to be set up in Gwadar for which a number of foreign companies have shown their active interest”, the state minister said.
Answering a question, Mr Ghumman said that the terminology of offering a “level-playing field” was being given up and foreign investors would be offered highly reduced tariffs so that they should invest in this part of the world. “They get this level-playing field every where and unless we offer them more than that they would not come here for investment purposes”, he added.
He also said that over $4 billion FDI target was being planned for the next financial year, excluding the amount that would come through the privatization proceeds.
“For 2005-06 we are hoping to attract up to $3 billion FDI”, he said, adding that during the first seventh of the current financial year $1.6 FDI had already arrived in the country.