ISLAMABAD: Pakistan expects net foreign direct investment (FDI) to jumpabout 60 percent in 2017/2018, the chairman of Pakistan’s Board ofInvestment said, but some Western investors appear to be put off by China’sgrowing influence in the South Asian nation.
Chinese companies are building roads, power stations and a deep-water portin Pakistan after Beijing offered more than $50 billion in funding forPakistani infrastructure as part of China’s vast Belt and Road initiative.
Chinese investment has helped spur Pakistan’s economic growth to more than5 percent, its highest in a decade, while also increasing Beijing’s cloutin Pakistan at a time when Islamabad’s relations with the United States, anhistoric ally, are fraying over Pakistan’s handling of militants and theconflict in Afghanistan.
Naeem Zamindar, a state minister responsible for promoting foreigninvestment in Pakistan, said some Western investors appeared reticentbecause of an incorrect perception that Chinese companies would get”exclusive advantages” and concessions that would not allow for an evenplaying field.
“A perception was created that the Chinese are taking over. The fact of thematter is that this is not true,” Zamindar told Reuters in his office inIslamabad.
“Pakistan’s government is very clear about it: we want investors of allhues to come in and participate in building this economy – whetherAmerican, English or Japanese.”
Zamindar said some Chinese companies building power stations had obtainedsoft loans but that was because the money was provided by Beijing, whichmade such terms a condition of its financing for projects that were part ofthe China-Pakistan Economic Corridor (CPEC), a key leg of the Belt and Roadinfrastructure network.
But for the second phase of CPEC, in which a series of Special EconomicZones (SEZs) will be set up to boost Pakistan’s industries, Chinesecompanies will not receive preferential treatment, Zamindar added.
“That is completely non-discriminatory,” he said, adding that Pakistan’sSpecial Economic Zones Act stipulates no country or company will getpreferential treatment within the SEZs.
“The (SEZ) concessions are published and are on the website, open to all.”
Zamindar said net FDI for the financial year 2017/2018 (July-June) isexpect to reach about $3.7 billion, with Chinese companies providing up to70 percent of the new investment.
Net FDI has been gradually rising since 2014/2015, when it plummeted toless than $1 billion. It rose to $2.3 billion last year, according tocentral bank data.
Foreign direct investment is separate from the China-Pakistan EconomicCorridor investments. More than 20 CPEC projects worth nearly $27 billionare currently being implemented, a senior government official told Reuters,meaning either work has begun on the projects or financing deals have beencompleted.
Zamindar said militant attacks were sharply down in recent years andsecurity was much improved, but some investors are unaware of this and hadan outdated “negative image” of Pakistan.
Yet overall interest in Pakistan had jumped, Zaminder said, and he wouldtour Britain, the United States, France and Saudi Arabia in coming weeks topromote the opportunities available in the country of 208 million peopleand a fast-expanding middle class.
“We are open for business.” – Agencies