Izzat Majeed of Salman Services (PVT) gives his views on international business opportunities in Pakistan
The word 'corruption' seems to crop up regularly in discussions about Pakistan's politics and business. Does this have a damaging effect on foreign investors' confidence in the country?
Corruption is a bad word for both direct and indirect foreign investors. At the same time, corruption is everywhere in the third world or emerging markets. Pakistan has a fair share of corruption. The only thing now with the change of government is that it has been recognised and laws have been put into force which will take care of both past and future corrupt practices.
This is an excellent development and should placate foreign investors to the extent that the Government is serious about tackling corruption.
Pakistan's economy is struggling, with the Finance Minister recently speaking of an industrial crisis on the manufacturing front. Can such an economy compete successfully for foreign intervention in the form of investment?
The last three years have been bad for the country from all angles, both economic and social. A cloud of gloom was hovering over the whole country. This is slowly clearing because of the new Government with a clear mandate to resolve the mess. The new Industrial Minister's top priority is to make Pakistan an economically viable entity and this has been more than proved by his policies to date. The backbone of the manufacturing sector is textiles, which has picked up and now Pakistan is going for industries that can stand on their own feet and not behind trade barriers; in other words, industries with some intrinsic value. The manufacturing sector is poised to grow by 7.8 per cent this year. Surely, this kind of scenario can be most attractive to foreign investors.
What role can investment play in Pakistan's development?
Pakistan is still a developing country with immense opportunities for investment in, for example, the infrastructure and energy sectors. Foreign investment in these and other sectors obviously would help Pakistan from a development point of view giving them a reasonable return on their investment.
In your view, are Pakistan's capital markets sufficiently well-regulated?
Pakistan's capital markets are extremely well-regulated. The corporate law authority keeps a stringent eye on what is happening on the stock markets. The OLA has enormous powers to interfere in the affairs of the corporate markets.
What has the Government done, in terms of incentives, for example, to attract investors to Pakistan? Could they do more?
Government has gone all out to attract foreign investment. It has done the following:
We feel there is not much more that the Government can do to attract foreign investment on the financial side. However, they could do more to better the social fabric of the society in terms of law and order, for example.
Are you optimistic for the future of Pakistan's economy?
We are very optimistic about the future of the Pakistan economy and its capital market for the simple reason that we have a Government in place which is going all out to improve the economy. The people of Pakistan are progressive and they want to improve their economic lot, which has been proved again and again in the past against all odds. With this new atmosphere, the right incentives and the enormous potential and opportunities that are available, there is no reason why Pakistan and its capital market should not do well.