Most of the local and foreign
investors often fall prey to tinted media reports about Pakistan. They may also
be fully aware that foreign media ignores positive news, but loves to give
prominence to items that are not even newsworthy according to international
reporting standards. In todays blog effort has been made to put the record
straight.
Many overseas analysts say that
foreign investors prefer to stay away from Pakistan, which is not correct. If
one looks at the history spread over more than six decades, any company that
entered Pakistan never took an exit due
to security reasons or unfriendly working environment. Those who left Pakistan,
the decisions were driven by their policies, either pulling out of that
particular business or this particular region. Some of the congloramates like
Abbott, Glaxosmithkline, Linde, ICI, Siemens, Racket Binkezer, Unilever, Pepsi,
Coca Cola and Standard Chartered Bank have been doing thriving business and
increasing their stake in Pakistan. Those who have a rather brief history are
KFC, Mc Donald, Nestle, Procter & Gamble, Colgate Palmolive and Gillette.
Pakistan enjoys a strategic
location, enjoying common borders with China, (second largest economy of the
world), India (third largest economy of the world), oil rich Iran, Afghanistan
(gateway to energy rich Central Asian countries), more than 1,200 kilometers
long coastline with three deep sea ports offering the shortest and most
efficient transit facilities to Afganistan, Central Asian countries and even
China. It will be correct to say that Pakistan is a natural trade and energy
corridor.
Two of the proposed gas pipelines:
1) Iran-Pakistan-India (IPI) and 2) Turkmenistan-Afghanistan-Pakistan-India (TAPI)
have to pass through Pakistan. These would not only help in earning millions of
dollars as transit fee, but supply of gas to Pakistan will help in containing
furnace oil import, an expensive fuel as compared to natural gas.
Though, India is constructing
Chabahar port in Iran and also linking it with central Asia by rail and road,
it will be difficult to undermine the importance of Gwadar port and Pakistan.
Keeping in view the success of (PARCO) Pak Arab Refinery (often termed mid-country
refinery) some other Middle Eastern countries have shown keen interest in
setting up three refineries near the coastline. First black and then white oil
pipelines have been constructed that link PARCO with ports located in Karachi.
Those investors who decided to
invest in Pakistan are fully aware of the real potential of the country. Some
of these are: 1) market comprising of nearly 200 million people, 2) country
enjoying ‘food security’, 3) having a vast cultivable area with world’s largest
man-made irrigation system, 4) country among the top producers of cotton, rice, sugarcane, wheat,
milk and fruits like mango and kinnow (tangerine).
Manufacturing sector, comprises of
textiles and clothing units, sugar mills, fertilizer plants, automobile (four
and two wheeler) assemblers, crude oil refineries, polyester staple fiber
manufacturers, etc. Most of these industries have been operating below optimum
capacity utilization due to failure to undertake timely BMR and shortage of
electricity and gas.
In fact Pakistan has around
28,000MW power generation capacity, but output hovers around 16,000MW due to
outdated power plants, also suffering from liquidity crunch which does not
allow them to buy required quantity of fuel. Expolration and production
companies face some difficulties in operating in Baluchistan and northern parts
of Pakistan due to the ongoing war on terror, as militants hibernating in
Afghanistan often indulge in cross border terrorism.
The average yield of major crops
in Pakistan is low as compared to other countries located in the region, but
the country has been a major exporter of textiles and clothing, rice, sugar and
wheat. Nearly 15 percent of food cereals and 40 of fruits go stale before
reaching the market because of inadequate storage and logistics. If modern
storage facilities and farm to market transportation could be improved, not
only the income of the farmers will be increased, but Pakistan would be able to
earn more foreign exchange. Going for value addition will further increase the country’s
exports.
If anyone foreign investor still
has some doubts, he/she should approach the Overseas Chamber of Commerce and
Investors (OCCI), American Business Council (ABC), German Business Forum. The details may also be respective embassies
and high commissions. Think about your business interest first and then about
geopolitics. Is is not a fact that some of Fortune-500 companies are stronger
than the governments of many Middle East and North Africa (MENA) countries?
