BOI Board of Investment 2 nd Asian Business Forum INVESTMENT DIVISION & BOARD OF INVESTMENT March 03, 2008
At The Center of Asian Growth Pakistan becoming Asia’s trade, energy and transport corridor BOI Board of Investment Land locked energy rich Central Asia Capital & Energy surplus Middle East Pakistan Booming South Asia 2 3
Country Profile • Population: 160 million (2006 est. ) • GDP (Nominal): US $145 billion (FY 07) • Foreign Investment: US $8. 4 billion (FY 07) • GDP per capita: US $925 (FY 07) • FX Reserves (February 04, 2008) : US $15. 074 billion • Stock Market Index (February 29, 2008) : 15, 078 BOI Board of Investment
BOI Improving Economic Indicators Board of Investment 2000 -01 2001 -02 2002 -03 2003 -04 2004 -05 2005 -06 2006 -07 Exports (B $) 9. 20 9. 13 11. 16 12. 31 14. 39 16. 47 17. 01 Imports (B $) 10. 72 10. 34 12. 22 15. 59 20. 60 28. 58 30. 54 Remittances (B $) 1. 09 2. 39 4. 24 3. 87 4. 17 4. 60 5. 49 FOREX Reserves (B $) 3. 22 6. 43 10. 72 12. 33 12. 61 13. 14 15. 18 Stock Exchange Index 1, 300 1, 520 3, 402 5, 279 7, 450 9, 989 13, 772 501 503 582 651 736 847 925 2. 6% 3. 6% 5. 1% 6. 4% 8. 4% 6. 6% 7. 0% GDP per capita ($) GDP Growth 4
Remarkable Demographics – Total population: 160 million – Population under 25 years: 100 million Demographics 81%<40 yrs Source: Economic Survey 2006 -07 BOI Board of Investment
Declining Poverty, Unemployment, Debt BOI Board of Investment • Poverty has declined from 34. 5% in 2000 -1 to 23. 9% in 2004 -5, which means that 13 million people have come out of poverty in this period. • Unemployment has fallen from 8. 3 % in 2000 -01 to 6. 2% in 2005 -06. • Public debt as % of GDP has fallen from over 100% of GDP in 1999 to 53. 4% in 2007.
Declining Public Debt Burden Public debt as % of GDP Source : Economic Survey 2006 -07 BOI Board of Investment
Pakistan: A Leading Reformer BOI Board of Investment • Runner-up reformer in the South Asian Region (after Maldives) according to the Report of the World Bank and IFC entitled “Doing Business in South Asia 2008” which compared business regulations in 178 countries around the world.
BOI Doing Business Ranking among 178 Countries Board of Investment Pakistan India Sri Lanka Bangladesh Ease of doing Business 76 120 101 107 Starting a Business 59 111 29 92 Dealing with Licenses 93 134 160 116 Employing Workers 132 85 111 129 Registering Property 88 112 134 171 Getting Credit 68 36 97 48 Protecting Investors 19 33 64 15 Paying Taxes 146 165 158 81 Trading Across Borders 94 79 60 112 Enforcing Contracts 154 177 133 175 Closing a Business 51 137 39 102 9
Top ranked countries in the region for “Ease of doing Business” BOI Board of Investment 10
Why Invest in Pakistan: Liberal Investment Policy BOI Board of Investment • Equal opportunity for local & foreign investors • All economic sectors open to foreign investors • Foreign equity upto 100% allowed • No Government permissions required • Attractive tax, tariff and other incentives • Remittance of capital, profits, royalty, technical & franchise fee allowed • Network of Export Processing Zones / Industrial Estates • Statutory protection foreign investment • Bilateral Agreements : - Investment Protection 47 Countries - Avoidance of Double Taxation 52 Countries
Investment Gaining Momentum Investment as a % Of GDP BOI Board of Investment
FDI by Country and Sector July – Dec 2007 -08 July-Dec BOI Board of Investment USD in millions 2007 -08 July-Dec USA 907 (44%) Communications 722 (35%) UAE 258 (13%) Financial Business 351 (17%) UK 174 (8%) Oil and gas Exploration 331 (16%) Switzerland 85 (4%) Cement 80 (4%) Japan 69 (3%) Transport equipment (Auto) 53 (3%) Others 573 (28%) Others 529 (26%) Total 2, 067 13
BOI Board of Investment Functions of ID & BOI
Mission BOI Board of Investment • Promotion of foreign and domestic private investment • Facilitation of foreign and domestic investors • Investment Protection (e. g. BITs) • Policy advocacy to improve investment environment 15
Pillars of Investment Strategy BOI Board of Investment • Enhancing Image of Pakistan as Investment Destination • Promoting Investment Projects • Strengthening Investment Protection • Structured Public - Private Policy Dialogue 16
Enhancing Image of Pakistan as an Investment Destination BOI Board of Investment • Pro-active image enhancement focusing foreign investors and international business media. • Sign MOUs with other Investment Promotion Agencies. • Arrange local and foreign Investment Conferences. • Appoint Honorary Investment Counselors. 17
Promoting Investment Projects BOI Board of Investment • Database set up for : – Standardized profiles of “marketable” investment projects – Marketing Network – Target investors and domestic joint venture partners • Facilitate investors at all stages of investment cycle utilizing existing offices in all provincial capitals. 18
Strengthening Investment Protection BOI Board of Investment • Increase investor’s confidence by improving the protection of contractual and property rights. • Strengthen domestic and international arbitration in line with international best practices. • Enforce Pakistan’s BITs and sign additional investment-related Agreements to provide credible security packages to investors. 19
Structured Public - Private Policy Dialogue (PPPD) BOI Board of Investment • Structured PPPD presently created by ID & BOI – Foreign Investor Council (FIC) headed by PM formed with international business leaders being members. – Advisory Boards for priority sectors formed and meetings held. – Frequent interaction with private sector representatives. • PPPD linked with: – – Competitiveness Support Fund initiatives (CSF). Public Private Partnership initiatives (IPDF). Small and Medium Enterprise promotion (SMEDA). Reforms of economic regulations - regulatory impact assessments by ERU. 20
Special Economic Zones (SEZs) BOI Board of Investment • SEZ’s instrumental in cluster building; also conducive to site development, administrative rationalization and security protection. • BOI is preparing a draft act on SEZs which will set out legal and institutional framework with incentive package. 21
Investment Opportunities BOI Board of Investment • Offshore & Onshore Exploration • Refining • Pipelines • Storages Mining Oil & Gas Priority Sectors IT & Telecom Power • Coal • Granite • Marble • Copper • Rocksalt • Semi-Precious Stones • Hydel • Thermal • Coal • Solar • Wind • Biogas • Call centers • Cell phone • E-Commerce • Software • IT Parks 22 18
Investment Opportunities BOI Board of Investment • Ports & Roads • Urban Mass Transport • Water supply & • Sanitation • Housing • Desalination Priority Sectors SMEs • Hotels • Resorts • Theme Parks • Cultural tourism • Entertainment Centers Tourism Infrastructure Agriculture • Leather • Electronics • Furniture • Gemstones • Jewelry • Food Processing • Sports & Surgical goods • Value added textiles & - Agri-Business - Corporate Farming - Fruits & Vegetables - Livestock & Dairy - Fisheries - Cool chains - Seed Production - Storages 23 19
Investment Opportunities BOI Board of Investment • Oil & Gas • Infrastructure • Power • Industry/ Real Estate • Banking Housing Priority Sectors Engineering Chemicals • Golf City • Water City • Sports City • Media City • Residential Complexes • Office apartments Privatization • Pesticides • Dyes • Agro Based • Mineral Based • Synthetic Fiber • Pharmaceuticals • Petrochemical • Complex/ Naphtha • Cracker • Light & Heavy Engineering • Automobiles • Auto parts • Agriculture Machinery • Steel Production • Textile Machinery 24 20
Five Key Reasons to Invest BOI Board of Investment 1. Geo-strategic location Gateway to the energy rich Central Asian States & the Financial liquid Gulf States 2. Trained Workforce Low cost skilled English speaking & flexible workforce Labour force of over 45 million Large pool of engineers, accountants, managers and IT Professionals 3. Economic outlook Average 7. 3% GDP growth annually for the last three years 4. Investment Policies Liberal policies and profitable opportunities Liberal trade and low tariff regime 5. Financial Markets Karachi Stock Exchange is one of the best Stock Markets in the region 25 34
BOI Board of Investment Thank you 26
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