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BOI
Jehangir BasharSecretary, Board of Investment28th September 2004
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Yazd
Kabul
Delhi
Patna
Herat
Kashi
U
Alma ty
Lahore
JaipurKanpur
Frunze
Masqat
Mashhad
Lucknow
Benares
Zahedan
Karachi
Amrit sa r
C
Dushanfe
Qandahar
Toshkent
Abu Zaby
Samarkand
Ashkha ba d
Islamabad
New Delhi
Kathmandu
Hyderabad
Ah ma da bad
Rawalpindi
Faisalabad
China
India
Iran
Kazakhstan
Pakistan
Afghanistan
Oman
Uzbekistan
Turkmenistan
Nepal
Kyrgyzstan
Tajikistan
b Emirates
Jummu &Kashmir
(Disputed Territory)
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Board of Investment
INVESTMENT ENVIRONMENT
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Fiscal Reforms
Deregulation & Privatization
Capital Market Reforms
Policies Pursued
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Improved Governance
Liberal Investment Regime
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Improving Economic Indicators
Source: State Bank of Pakistan (SBP), Federal Bureau of Statistics (FBS), Central Board of Revenue (CBR)
Indicators 2000 - 01 2001 - 02 2002 - 03 2003-04 + (-) %
Exports (Billion $) 9.20 9.13 11.16 12.27 9.9Imports (Billion $) 10.72 10.34 12.22 15.47 26.6Trade Balance (Billion $) (1.52) (1.20) (1.06) (3.17) 199.1Net Revenue (Billion Rs.) 393.91 404.07 460.59 518.80 12.6FDI (Million $) 322.40 484.70 798.00 949.40 18.9Workers Remittances (Billion $) 1.09 2.39 4.24 3.87 (8.7)Forex Reserves (Billion $) 3.22 6.43 10.72 12.33 15.0Exchange Rate (Rs./ US$) 58.4 61.0 57.7 58.0 0.51Stock Exchange Index 1300 1520 3402 5,279 55.17GDP Growth 2.6% 3.6% 5.1% 6.4%Inflation 4.4% 3.4% 3.3% 3.9%
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Equal treatment of local & foreign investors All economic sectors open to FDI
Foreign equity upto 100% allowed
No Government permissions required
Attractive incentive packages Remittance of capital, profits, dividends, royalty, technical &
franchise fee, allowed
Network of Export Processing Zones/ Industrial Estates
Import of raw material for export manufacturing zero-rated
Bilateral Agreements : Investment Protection: 46 countries
Avoidance of Double Taxation: 52 countries
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POLICYPARAMETERS Manufacturing Sector
Non-Manufacturing Sectors
Agriculture Infrastructure& Social
Servicesincluding IT &
Telecom Services
Governmentpermission
Not required except for specifiedindustries *
Not required except specific licences fromconcerned agencies
Remittance of capital,profits, dividends, etc. Allowed Allowed
Upper limit of foreignequity (%) 100 60 100 100
Minimum investment(M $) No restrictions 0.3 0.3 0.15
Customs duty onimport of PME (%) 5 0 5 0-5
Tax relief (IDA, as % ofPME cost) 50 50
Royalty & technical fee No restrictions Initial lump-sum upto $100,000Max rate 5% of net sales
* Specified Industries:i) Arms and ammunition ii) High explosives iii) Radioactive substances
iv) Security printing v) currency and mint
Policy Package
PME= Plant, Machinery and EquipmentIDA= Initial Depreciation Allowance
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Two seaports (third one under construction)
Well established network of dry ports
Air links to all major cities
Extensive rail and road network
Modern telecom facilities
Trade facilitation (reduced clearance time and simplification ofcustoms procedures)
Well established banking system
Low mark up charged by banks Securities & Exchange Commission of Pakistan (SECP)
oversees the Company Law and ensures good corporategovernance
Quick registration process by SECP
Established Trade &
Physical Infrastructure
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Attractive Investment Climate
Strong privatization, liberalization, deregulation
Stable exchange rate
Increasing reserves
Vibrant capital market
Independent regulators
Reformed banking system
Increasing FDI & foreign remittances
Improving Credit Rating ( B2, B+)
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ABC PBBAG Companies participated 41 45
Opinion of the business climate
enthusiastic/optimistic 63% 36%
Domestic economy improved 93% 80%
External political situation improved 78% 53%
Internal political situation improved 29% 69%
Law & order improved 34% 93%
Consistency of policies 45% 64%
Implementation of policies improved 31% 58%
ABC: American Business Council
PBBAG: Pakistan Britain Business Advisory Group10
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Board of Investment
Source:Company Reports (annual accounts)
ROE: Return on Equity
Corporate Performance - ROE
Company Sector 1999 2000 2001 2002 2003 Average
Shell Pakistan Oil & Gas 22% 27% 20% 18% 21% 22%
Hubco Power 24% - 39% 28% 24% 29%
British OxygenCompany Industrial Gas 27% 25% 11% 43% 48% 31%
Glaxo Welcome Pharmaceutical 19% 22% 8% 15% - 16%
Lever Brothers ConsumerItems 52% 106% 45% 148% - 88%
Gillette Pakistan ConsumerGoods 33% 33% - 41% - 36%
Colgate Pakistan -do- 18% 21% - 31% 36% 27%
Nestle Milkpak Food 33% 32% 25% 75% - 41%
General Tyre Tyres 21% 29% - 23% 24% 25%
Siemens Engg. Engineering 10% 20% 17% 22% - 17%
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0
200
400
600
800
1000
1200
1400
1600
1996 1997 1998 1999 2000 2001 2002
World FDI In Bln $ Pak FDI in Mln $
BillionUS$
MillionUS$
World FDI Comparison With
Pakistan
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Board of Investment
Pakistan Investment Inflows
(1990 2004)
237
335306
354
442
1,102
682
601
472 470
322
485
0
200
400
600
800
1,000
1,200
90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03
Source: State Bank of Pakistan
798
MillionUS$
950
03/04
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Board of Investment
ValueinMillion
US$
Korea
2.5%Others
22.3%
Japan
5%OIC
10%
USA
37.7%
UK
19.9%
Germany
3.1%
Pakistan: Sources of FDI
(1990 2004)
Total : $ 7.782 Billion
Source: State Bank of Pakistan 15
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Board of Investment
Power
17%
Others
6 %
M anufacturing
2 3 %
Services
2 6 % IT & Telecom
7%
Oil& Gas, M in.
Quarrying
2 1%
Pakistan: Sectoral FDI
Total : $ 7.782 Billion
Source: State Bank of Pakistan 16
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BOI
Board of InvestmentFDI Inflows (2003-04)
Source Million $ Leading Sectors Million $
USA 238.4 Oil & Gas and Refining 273.3
Switzerland 205.3 Financial Business 242.1
Norway 146.6 Telecommunication 221.9
U.A.E. 134.6 Trade 35.6
U.K. 64.9 Textiles 35.4
Others 159.6 Others 141.1
Total 949.4 Total 949.4
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http://images.google.com.pk/imgres?imgurl=http://sumagazine.syr.edu/fall98/hill/art/textiles.gif&imgrefurl=http://sumagazine.syr.edu/fall98/hill/hill.html&h=235&w=321&sz=48&tbnid=sNmh0LeIyqoJ:&tbnh=83&tbnw=113&start=2&prev=/images%3Fq%3DTextiles%26hl%3Den%26lr%3D%26ie%3DUTF-8http://images.google.com.pk/imgres?imgurl=www.catalyst121.com/images/communication.jpg&imgrefurl=http://www.catalyst121.com/communications.htm&h=200&w=152&sz=18&tbnid=bqyj5AzaHtIJ:&tbnh=98&tbnw=75&start=74&prev=/images%3Fq%3Dcommunication%26start%3D60%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DN7/30/2019 Presentation by Secretary BOI
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Pakistan
- Home To Over 600 Multinationals
Deutsche Bank
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US Companies in Pakistan
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Board of Investment
US Companies in PakistanMembers of American Business Council
Sector No. of Companies
Pharmaceuticals 10
Services 8
IT & Telecom 7
Food & Beverages 7
Chemicals 6Financial Business & Banking 5
Consumer Products & Cosmetics 5
Oil & Gas 2
Electrical & Electronics 2Textiles & Leather 2
Power 1
Others 2
Total 5719
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Board of Investment
- American Express Bank - Citibank
- American Life Insurance - New Hampshire Insurance
- ACE Insurance - DHL
- Gerrys International - Beckton Dickson
- KODAK - Coca-Cola
- Intel Corporation - NCR Corporation
- Unisys Pakistan - 3M Pakistan
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Prominent US companiesin Pakistan
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Oil & Gas
Offshore
& onshore
exploration
Refining
Pipelines
Storages
Call centers
Cell phone
E-Commerce
Software
IT Parks
IT & Telecom
Agri-business
Corporate farming
Fruits & vegetables
Livestock & dairy
Fisheries
Cool chains
Storages
Seed production
Hydel
Thermal
Coal
Solar
Wind
Biogas
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Board of Investment
Textiles
Cotton fabrics Madeups
Cotton yarn
Knitwear & readymade garments
Leather & leather products
Footwear
Surgical instruments
Sports goods
Carpets
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http://images.google.com.pk/imgres?imgurl=http://www.veralabs.com/veramap.jpg&imgrefurl=http://www.veralabs.com/exports.htm&h=396&w=600&sz=39&tbnid=JX2G_4r4XFEJ:&tbnh=87&tbnw=131&start=44&prev=/images%3Fq%3Dexports%26start%3D40%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DNhttp://images.google.com.pk/imgres?imgurl=http://www.veralabs.com/veramap.jpg&imgrefurl=http://www.veralabs.com/exports.htm&h=396&w=600&sz=39&tbnid=JX2G_4r4XFEJ:&tbnh=87&tbnw=131&start=44&prev=/images%3Fq%3Dexports%26start%3D40%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DNhttp://images.google.com.pk/imgres?imgurl=http://www.veralabs.com/veramap.jpg&imgrefurl=http://www.veralabs.com/exports.htm&h=396&w=600&sz=39&tbnid=JX2G_4r4XFEJ:&tbnh=87&tbnw=131&start=44&prev=/images%3Fq%3Dexports%26start%3D40%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DNhttp://images.google.com.pk/imgres?imgurl=http://www.veralabs.com/veramap.jpg&imgrefurl=http://www.veralabs.com/exports.htm&h=396&w=600&sz=39&tbnid=JX2G_4r4XFEJ:&tbnh=87&tbnw=131&start=44&prev=/images%3Fq%3Dexports%26start%3D40%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DNhttp://images.google.com.pk/imgres?imgurl=http://www.veralabs.com/veramap.jpg&imgrefurl=http://www.veralabs.com/exports.htm&h=396&w=600&sz=39&tbnid=JX2G_4r4XFEJ:&tbnh=87&tbnw=131&start=44&prev=/images%3Fq%3Dexports%26start%3D40%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DN7/30/2019 Presentation by Secretary BOI
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PRIVATIZATION
BOI
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BOI
Board of InvestmentPrivatization Program
Covers all sectors of the economy
Major transactions in finance, industry,telecom and power
Two pronged strategy:
- Strategic sale
- Selling shares via stock market
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Board of Investment
Privatization Recent Successes
18 transactions (Rs. 49.6 billion)
Cement, hotel, banks, oil & gas
Habib Bank Limited Rs. 22.4 billion
Pakistan Petroleum Limited Rs. 5.6 billion
Sui Southern Gas Co. Rs. 1.7 billion Pakistan International Airline Rs. 1.3 billion
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Period No. ofYears Proceeds (Rs. Billion)Total Average per year
1989 - Oct 1999 10 60 6
Oct 1999 - Nov 2002 3 36 12
Nov 2002 - Aug 2004Less
than 2 50 26
Privatization Proceeds
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Strategic Sale:
Faisalabad Electricity Distribution Jamshoro Power Pakistan State Oil (PSO) Karachi Electricity Supply (KESC)
Oil & Gas Development Corporation Ltd. (OGDCL) Pakistan Telecom Co. Ltd. (PTCL) National Investment Trust (NIT) Pak Arab Fertilizer Pak American Fertilizer
Shares to General Public
Kot Addu Power Company
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BOARD OF INVESTMENT
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Investment promotion
Investors facilitation
30 HICs in 22 countries; 3 in USA
Visa assistance
Website
Publications
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Board of Investment
BOI
Board of Investment
Thank You