Pakistan seeks foreign investors in energy sector New government looks to increase trade with the US By Sarah Algethami, Staff ReporterPublished: 16:25 June 25, 2013 Share on facebookShare on twitterShare on emailShare on printMore Sharing Services8 Image Credit: Ahmed Ramzan/Gulf News Khawaja Asif, Minister of Water and Power, Pakistan, and Richard Olson, Ambassador to U.S in Pakistan, during the 2nd U.S-Pakistan Business Opportunities Conference at Dubai International Financial Centre, Dubai. : Dubai: Richard Olson, US ambassador to Pakistan, said Pakistan’s new government led by Prime Minister Nawaz Sharif can improve overall business in the country, making it appealing to US investors, during the second US-Pakistan business opportunities conference in Dubai on Tuesday. “The new government could answer the question: why Pakistan?” said Olson. Some of the economic reforms that will result from the new government include “the rationalisation of energy tariffs in line with international prices, higher investment in the energy sector, revamping and privatising state-owned enterprises, reducing bureaucratic procedures, opening up markets and encouraging regional trade,” he said. Khawaja Asif, Pakistan’s minister of water and power, said his country is ramping up efforts on improving the energy sector to reel in international investments, alongside the rationalisation of energy tariffs. “We are making the sector saleable with good return on investments. A challenge we have is the big supply and demand gap. So, we are looking at new sources of energy, like coal and solar and wind energy. And we are filling the gap with local and international investments,” Asif said. Additionally, Asif said the energy sector will have a lot of opportunities. “It will be transparent [and] all the international investors will be treated fairly, transparently. And we’ll try to facilitate as much as possible that investments go into our country [and] to this particular sector, both petroleum, water and power.” Huge resource potential Meanwhile, Olson said that Pakistan‘s “huge resource potential,” educated labour force and location, which is close to other energy-rich Asian states, make it an attractive market for US investors. The US funds energy projects in Pakistan that are expected to provide electricity to around two and a half million households by 2014. Trade between the US and Pakistan amounts to around $6 billion (Dh22.04 billion) per year. The US has invested in different sectors in Pakistan, including electricity, IT, agriculture and education. Additionally, the US accounts for the majority of Pakistan’s exports, said Olson, which totals to $3.7 billion. The US accounted for 10.23 per cent of the total foreign direct investment (FDI) to Pakistan between July 2012 and April 2013. Also, through the Pakistan Private Investment Initiative (PPII), the US funds well-run small and medium sized Pakistani businesses that have the potential to grow, said Olson. Opportunities abound Pointing to the opportunities that the US can offer to Pakistani businesses, Olson said: “Pakistani companies can export 3,511 goods to the United States duty free …the United States supplies equipment that can make Pakistani manufacturers world-class… American investors have historically been among the top investors in Pakistan. Pakistani companies looking for capital to grow their business should look no further than American investors.” Olson said business between the two countries could be very successful. “Some US consumer goods companies are seeing Pakistan among their 10 most profitable markets worldwide… some Pakistani IT companies are seeing revenues grow by more than 30 per cent and they get much of their sales from US buyers,” he said. Meanwhile, Pakistan is trying to improve international trade through concessions, Asif said. On business with the US, he told Gulf News: “If the [US] barriers are removed, we will increase trade.” Some of the factors inhibiting Pakistani businesses from entering the US market include import duties and tariffs, he said. But he added that “the market in the US is open for Pakistanis.” A major challenge to investments in Pakistan is a lack of security among foreigners in the country. The recent attack on at least nine tourists at a mountain camp at Nanga Parbat has raised the topic of security again.
Posted on: Wed, 26 Jun 2013 08:15:48 +0000
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