Pakistan ‘investment destination’ for foreigners: Abdul Razak Dawood

ISLAMABAD: Chinese companies have started treating Pakistan as investment destination and two companies from China, Long March and Double Star, are into joint ventures here.

Talking to The News, Prime Minister’s Adviser on Commerce Abdul Razak Dawood said Long March has made a joint venture with Servis group in footwear and Double March has partnered with Daewoo Pakistan Express Service and MSD Tire.

He said more investment from mega Chinese companies is also in the pipeline as companies like Li & Fung known for making garments, toys and other products are also in the process of making their mind to come to Pakistan with huge investment.

He said that improvement in economic ties with the US depends upon the cooperation between the two countries over smooth withdrawal of NATO and US forces from Afghanistan. No progress has so far been made since the last visit of Prime Minister Imran Khan to the US when it comes to any kind of initiation of talks on issues such as TIFA (trade Investment framework agreement) earlier signed under Musharraf regime, BIT (Bilateral Investment Treaty and ROZs (Reconstruction of Opportunity Zones) and to this effect, ice has not melted yet.

He said that in his recent visit to China, he came across Mr Fung, owner of internationally known company — Li &Fung — in a meeting wherein he (Mr Fung) vowed that his company will invest massively in Pakistan. The said Chinese companies will send their products from Pakistan to Europe and the US and this is how Pak exports would surge manifold in future.

He said Pakistan is toeing the penetrating policy into the markets of other countries that China adopted way back in 80s, 90s and 2000s. The adviser said that he is persuading Pakistan’s manufactures to send their products outside the country in quantity terms at the maximum to attain the market share. He argued that China adopted the penetration policy to first flood the world with its products at lower prices and then started jacking up the prices of their products after attaining the market share.

Mr Dawood, however, admitted the fact that the government has so far not succeeded, but is striving in getting removed the travel advisories imposed since long against Pakistan by developed economies such as the US, Germany and Japan and others countries.

He didn’t hesitate to say that in spite of the travel advisory against Pakistan, many business people from China, Korea, Turkey, Germany, Taiwan, Italy, Britain and Netherland are in Pakistan looking for business opportunities.

Pakistan has climbed 28 points on the World Bank’s ease of doing business index that has given an encouraging signal to the investors from abroad, he added. Mr Dawood said that his ministry is trying to persuade big brands of USA, Europe and China to open their representative offices in Pakistan as they have opened in Bangladesh, India and Vietnam.

So far he said that he could not succeed on this front. However, he mentioned that Hugo Boss, a German big brand, may open its representative office in Pakistan, adding the top management of this is seriously looking at pleasant developments taking place in Pakistan in the economic and business fronts.

He admitted that many towering business figures are saying that they have export orders from abroad, but are unable to meet them on account of liquidity crisis that has further aggravated because of consumption-based tax system.

‘We are trying to bridge the gap between the assertions of FBR people and businessmen on the sales tax refund issue,’ the adviser said adding that :’Yes, business community particularly exporters are facing the issue of working capital which has aggravated since the introduction of implementation of SRO 1125 heralding the end to zero-rated industry and to this effect the government is trying from pillar to post to resolve this very issue.’

When his attention was drawn towards the government decision to ask NAB to constitute the committee dealing with cases of businessmen, he said that he is not satisfied with the decision.

He will meet the prime minister today (Thursday) and suggest the government make the committee, not the NAB. However, he mentioned saying that under a long-term financing scheme, the State Bank of Pakistan has extended this facility of Rs100 billion that will be availed by the major business groups.

However, he feared that SMEs may not be able to use this facility, but the government wants SMEs to also use this facility.

To a question, he said that the government is in the process to carve out a mechanism to provide maximum ease to Small Medium Enterprises (SMEs) and in the next three months, several actions will be taken to increase the exports of SMEs, and to this effect, DTRE rate will be altered for them.

He said that SMEDA (Small Medium Enterprises Development Authority) is also being shaken up, improved and made commercially viable entity.

Mentioning the operationalization of FTA-II, he said that trade agreement with China is going to be operational from December 1, and on short term basis, Pakistan’s exports will rise by $500 million. However on medium and long terms basis, the figures are being worked out about exports to China.

The adviser, however, said that in the first four month of financial year 2019-20, the exports went up by 3.58 percent in dollar terms and imports shrank by 20 percent and this is how trade balance shrank by $3.99 billion when compared to corresponding period of last year.

However, remittances tumbled to $7.4 billion in first four months of current fiscal from 7.6 billion in last year’s same period.

The adviser said that apart from many challenges, he is optimistic that things are in right direction and the exports from October onward will increase manifold as compared to the exports registered in first four months of the ongoing financial year.