KARACHI, Nov 10: The foreign corporate citizens, who had left after September 11 catastrophe, are returning to Pakistan. The threat perception has subsided and foreigners now feel secure in their jobs. They are back in business.
Every crisis throws up an opportunity and with every opportunity there are risks, says head of a multinational company. And financial analysts see bigger risks as an opportunity for greater gains. Banks charge different rates of interest from their clients, depending on the varying degree of risks involved in lending. In the current economic scenario, sovereign risk has brought dividends to insurers and shipping lines in the shape of war risk premium. In the past, wars have often pulled the economies out of economic slump.
Among the many foreigners, who have come back are Hubco chairman Vince Harris and general manager Swiss Air Pakistan Hanspeter Wegmullar, two officials of Shell Pakistan and several experts of oil companies. Foreigners have been visiting Pakistan for a day or even for a few hours to carry out urgent or special assignments. OCCI secretary-general Zahid Zaheer confirmed that foreigners are coming back.
Yet the multinationals are not going to take any major investment decisions. Projects under execution would, however, be implemented as the ICI is doing. By nature of their operations, multinationals specially in manufacturing, have long term stakes. The consul general of Italy Fabrizio Nicoletti told Dawn that his government has, for the time being, postponed the opening of trade commission in Karachi.
But entrepreneurial minds are looking for business opportunities after September 11. They are organizing a Round Table Conference: “Business opportunities beyond tomorrow” in Karachi on November 14.
Informal discussions are also taking place among trade groups. Recently, a closed door meeting was organized by Young President Club on current economic scenario and opportunities offered by it. Multinational heads and foreign bankers hold regular meeting to exchange views on changing business environment.
The Round Table Conference will explore new innovative business opportunities, both in traditional and non-traditional areas. If the brain-storming session proves useful, the organizers plan to hold a regional conference.
And the main objective is to explore the possibility of a re-location of the service sector in the coming decade—just as 1970s and 1980s experienced a re-location in industrial production. The East Asians were the beneficiaries of the process of relocation.
Among those invited to participate is Dr. Abdul Hafeez Sheikh, finance minister for Sindh. As a former world bank official, he has had exposure to management of crises in several countries. The organizers of the conference, Gallup-JWT Asiatic say that now is the time to assess the dislocation of the international service sector market in North America and Europe and to identify the likely alternatives. And they pose the question: Will there be a new Asian and Middle Eastern clientele for professional education, quality health care and organized tourism?. And can Pakistan gear up to these services? It may seem far-fetched at a time when Pakistan is on negative travel list and many foreigners see the country as a hardship station. But one lesson from the event of September 11 has been the speed with which realities can change in a post modern economy.
The post-September 11 situation may also help promote regional trade and co-operation with deepening recession in the US and industrialized economies of Europe. The trend is already evident in exports. Region-wise, Asia is the largest export market for Pakistan. In the last fiscal, the share of Asia in the country’s total exports improved to 36.9 per cent against the previous year’s 34.5 per cent.
It is Arab investors who are still looking at the potential of Pakistani market after September 11. Of the three bidders from 21 Expressions of Interest for United Bank, two are locally incorporated banks with major Arab stakes. Fauji Foundation withdrew because its European joint venture partner wanted more time to think after events of September 11. Those left in the field are: Muslim Commercial Bank, Bank Alfalah in association with Bestways, Union Bank supported by its parent “Nimir Fund” created by Saudi individuals. Al Falah Bank is owned by an Abu Dhabi prince and Bestways is managed by Sir Mohammad Pervez.
Official sources say that three candidates left in the field are serious and are eligible for acquiring MCB. The Arab investors have not withdrawn from the pre-bid qualification as have their western peers after the September 11 attack in New York and Pentagon.