ISLAMABAD, April 25: Miles Young, Chairman, Pakistan-US Business Council, said here on Thursday that US businessmen strongly support a bilateral investment treaty (BIT) with Pakistan. “We are expecting that the BIT would be signed soon, he told Dawn after concluding his three-day visit to Pakistan.
He further stated that the energy crisis, low tax-to-GDP ratio and poor intellectual proprietary rights implementation are hampering investment in Pakistan. The poor law and order situation in the country did not figure in the concerns of the US businessmen, he said.
“Security situation is an issue, but multinationals work in the abnormal situation around the globe,” he said, adding the security issue is not common to Pakistan.
“Most of the US companies are doing their businesses in a normal way. It is an issue but certainly not affecting the US investors,” Mr. Young said.
The most important issue from the US perspective was the poor implementation of IPRs laws in the country.
“The IPR certainly gives negative signal to the prospective US investors,” he said, adding that the government would have to take this issue very seriously.
The US government had already placed Pakistan among those nations where IP is poorly implemented — priority watch list.
Pakistan’s position is expected to move to a very sensitive level in terms of violation of IPRs, but he avoided explaining how this decision is going to have an impact on Pakistan.
The US report is expected soon which will clear Pakistan’s position in terms of IPRs violation.
He said legislation is there in Pakistan but the question is how it is going to be implemented.
Mr. Young said that American businessmen have a concern on the low-tax-to GDP ratio in Pakistan.
The tax collection is not going into the system, he said, adding it was slightly unfair that people are not paying their due taxes in this country.
He said the foreign direct investment (FDI) would increase from the US following strong IPRs, resolution of energy crisis and transparency in decision making.
He said the transparency at the decision level, especially in procurement is very crucial for investor confidence and decision making.
Asked about the election outcome on Pakistan-US business relations, Mr Young said election is taking place in a pretty normal way.
“This will enhance the business confidence as well,” he elaborated.
Terming his visit positive, chairman of the Pakistan-US business council said that he believed that business relation needs to be strengthened further.
“I expect the business relation will further enhance in the years ahead,” he predicted.
“During the three-day visit, we highlighted that the right enabling policies coupled with strong partnerships will allow Pakistan to enhance governance and the rule of law, which are critically needed to attract foreign investment,” said Young. In particular, intellectual property rights protections and improved implementation of agreed economic policies will help American companies view Pakistan as a favourable investment destination.
Increased US investment will in turn accelerate GDP growth which must be a primary priority of any new government after the elections, he said.
To revive US investment in Pakistan, a broad-based American business delegation will visit Pakistan soon after the new government comes into power exploring investment opportunities, especially in the energy sector of the country.
Young was accompanied by USPBC Executive Director Esperanza Jelalian.
“Throughout our discussions, we carried the message that the US and Pakistan need to realise the potential in the bilateral commercial relationship, said Jelalian.
“With a growing population of more than 190 million people, Pakistan represents an important market for US products and services,” she added.