FDI strategy to be given legal cover

The Board of Investment (BoI) has chalked out a comprehensive strategy for providing legal cover to promote the objectives of the Foreign Investment Strategy which will help boost Foreign Direct Investment (FDI) in FY12. Under the plan, the draft of Special Economic Zones (SEZs) Bill will be tabled in the Council of Common Interests (CCI) for approval.
The bill approved by the Cabinet in May 2010 has recently been amended in the light of comments of the provincial governments. The bill once passed will ensure setting up of competitive projects in a geographically defined area with required quantum of confidence, protection and facilitation competitively available to investors in the comparable economies.
The BoI will push the government for continuity of incentive package for investors for keeping alive the interests in Reko Diq Gold project in Balochistan and development of Thar Coal in Sindh. Regarding Japan specific investment and to improve the general investment climate, a separate plan will be forwarded for approval which is bound to encourage Japanese companies to look towards Pakistan as a destination for new investment in general and relocation of some of its investments in particular out of Asean region.
The Board is initiating Public Private Sector Dialogue (PPD) to involve private sector in policy formulation. Structured dialogue with private sector under PPD will help identify projects in target sectors to develop competitive projects for promotion of FDI.
It is anticipated that FDI will come for oil and gas exploration, trade, financial business, telecommunication, construction and chemicals in view of the measures aiming at opening up markets for private investment and limiting the role of the government for bringing change in the form of increased competition and better services at micro level of the economy.
The Board realizes that investment in the form of FDI will be highly dependent on the law and order situation, infrastructure investment and introduction of reforms to create conducive environment and also on increased competition in the domestic market. Pakistan received FDI worth $1.231 billion during 10 months (July-April) of FY11. The Foreign Portfolio Investment (FPI) stood at around $302 million.
The central bank said that the FDI stood at $126.8 million during April of current fiscal year while FPI was $66.6 million. The efforts are directed to improve competitiveness of Pakistan as an investment location relatively better than other countries. The aim is to boost Pakistan's "international competitiveness" from 101 (out of 134) on a global scale in 2009 to somewhere between 50-60 being crucial for Pakistan's targeted growth rates in general and FDI in particular.
The strategy encompasses a broader "Investment Generation Cycle" including an identification and development of "focal sectors" and identification and development of "competitive projects" in these focal sectors. Identification and advocacy of "policy measures" likely increasing profitability with decreased risk level of investment in Pakistan along with promotion of competitive projects with a focus on "target investors".