Posted by: Administrator | 27 September, 2006

President Musharraf addresses Joint Business Meeting in Philippine

19 April 2005, Philippine

Bismiallah-hir-Rahman-nir-Raheem Thank you very much for all the praises showered on me and really wondered whether I deserve all of it but it put that much pressure on me to perform more. Ambassador Donald G.D, president Philippine Chambers of Commerce and Industry, president of Federation of Philippine Chinese Chambers of Commerce and Industry, president Philippine exporter confederation, chairman Philippine Pakistan Council, distinguish guests, Excellencies ladies and gentlemen.

It is indeed a privilege for me and I am extremely glad to be able to talk and express my views to such an impressive gathering or corporate leaders, businessmen and investors. I believe that in the present era political and diplomatic relationships get cemented only through economic, commercial and trade ties and therefore I come to Philippines to cement the already existing political bondages and linkages, cordiality, we have in our political relationship and seeing the international issues with similarities.

I come to cement these bonds through trade, commercial and economic relation who at the moment, may I say are dismal. I think the figures should not even quote; therefore I come to give boost to enhance these economic relations. I would like to speak on the scope of improvement, enhancement in our trade interaction and also talk of the possibilities of investment in Pakistan or joint venture in Pakistan.

Pakistan follows policy of liberalization, de-regulation and privatization. We have followed this policy very earnestly in the last five years that I have been in picture. We have created an investment friendly environment to attract investment. When I was back in 2001 discussing the issues of economy, the economic malice of Pakistan with the Chinese Premier, I was telling him that the investment is not coming or investors has left Pakistan. He made very interesting remarks that investors are like pigeons that if the government takes wrong decisions and steps all the pigeons fly away together but when we want to get them back they come one by one and never come together. I am trying to running around the world and looking to everyone and business community is everywhere, I am trying to draw investment one by one into Pakistan. But basically we have created a friendly environment. I consider that the prerequisite for any business to flourish is vibrant and stable economy of the country. In this area as brought out by the ambassador we have very stabilized economy.

We are moving the economy forward at rate growth of GDP 6.4 per cent last year and cross 7 per cent this year and I am very sure that we will sustain this growth in spite of the rise in the oil prices and we hope to go to 8 per cent even beyond in coming years. All the macro-economic indicators are positive and not a single one is negative. We turned the economy around because we check the fiscal deficit and brought it under control four (4) per cent. We converted the balance of payment of 4 to 5 billion dollars every year to a surplus of about two (2) billion dollars through managing our earnings and managing our expenses. We have foreign exchange reserve which is equivalent to [about] 11 months of imports and economists tell me that having foreign exchange reserve more than 6 months imports is considered to be good. So I think we are very good on our foreign exchange reserve. All other indicators whether it is exports which has been reasoned by over 80 per cent from last four to five years. To revenue collection which has registered an increase of almost 92 [%] per cent by last four to five years. Two remittances which have increased by 400 [%] per cent since 1999, we are doing well on all fronts of economy, therefore our credit rating has been enhanced substantially and our exchange rate is very stable. Our stock exchange is the best performing stock exchange of the world; you may be surprised to hear.

Therefore I am very proud to say our economy is rising and we are in the process now tickling the benefits of our rising economy to the people of Pakistan through poverty alleviation and through addressing the issue of joblessness and may I proudly say that today first time in the history of Pakistan, joblessness and poverty has shown decline and we will sustain this because we are strategized how to remove poverty or address the issue of joblessness therefore ladies and gentlemen with all this FDI foreign direct investment and investment by our local Pakistanis is going now 2 by leaps and bounds. Today hotel occupancy in Pakistan is 100 [%] per cent, there is shortage of accommodation and many of delegations can not come because they don’t have a room for themselves. Therefore all theses people in the hotels, I check this myself whenever I go out at nights some times for a cup of coffee or hot chocolate that I like, I check who the people staying they are all foreign investors in Pakistan in various areas of industry. So this is the kind of investment climate that is going on. So the basic parameter of investment of economic revival, economic stability of Pakistan exists now.

The other issue is law and order for good business law and orders is essential. May I say that terrorism has been controlled in Pakistan, we have succeeded in operating against terrorists in our cities and in our mountains and the law and order situation prevailing at the moment in Pakistan is good. There are some elements of sectarian extremism which do exist but these do not create any affects on the investment climate or the business environment in Pakistan. So I would say that in the overall context the law and order situation in Pakistan is conducive to have business environment and business trading in all its context is very lively in Pakistan. I am also aware of the very fact that it is private sector which generates business trade and commercial activity. The public sector can only facilitate therefore in my meetings at the delegation level and in my meetings with President Gloria, we decided that we must have a joint business council, we must have a joint economic commission so that we institutionalize whatever we want to do, it is through these institutions that the public sector will facilitate interaction between the private sectors of the two countries and therefore facilitate trade and commercial activities through private sector involvement.

When we talk specifically of trade I know and I have gone through, what items of concern to both Philippines and Pakistan. My Commerce Minister and my Chairman of the Export Promotion Bureau (EPB) always make it a point to exactly tabulate for any country that I visit, that what there exports and what there imports are and in what quantity and what Pakistan exports and imports of the same item are and how much we import and export from each other. Let me tell you the area of focus where Philippines imports and Pakistan exports to the whole world but darely substantial export to Philippines.

Textiles is Pakistan backbone, 60% of our exports is textiles this is our strength and we have high quality in this but I know that there is tremendous amount of exports in Philippines but minimum from Pakistan. We think Pakistan rice is of the best quality in the world, again this the area where I don’t think Philippines is importing from Pakistan. We export leather and leather products all over the world, we export surgical instruments all over the world to Europe specially, we export marble, gemstones and also footwear which are cheap and good. We do exports but we do not export to Philippines in substantial quantity.

We also need to focus on what Philippines exports to the world and what we import from the world but not from Philippines. When you interact with the private community sectors of Pakistan, to focus the areas where you can increase your exports to Pakistan. Pakistan would be willing certainly to raise the level of trade from its present dismal condition by increasing the imports from Philippines. Now let me come to the more serious issue of investment and joint ventures.

I would start by saying what does an investor look for and to a layman who is a non economist, I think he looks for security of his investment. Let me assure you that all investments in Pakistan right from the day of our independence have remained secured they have never been harmed in spite of the fact that in the decade of 70’s we went through period of nationalization, not one [of about] 6 to 7 hundred foreign investors was touched. Let me also say while we are independent power producers who came to Pakistan in the year of 1994 and there were deals which we feel were unfair to Pakistan but let me assure you we kept our obligations to all the payments that were to be made.

During my tenure in the last years from 1999 onwards we have met all our obligations in spite of the fact, as I said they were adverse to us. But we have maintained commitments of the government therefore investments in Pakistan are secure and there is also a legal cover for their security. The other thing an investor looks at is the profitability. Let me tell this to the gathering that I check in a broad term how much the foreign investor in Pakistan profits. Without any doubts let me tell you that all of them gain in double figures most of them have made profits between 20 and 50 [%] per cent. I don’t think this kind of profitability is available in any country of the world. Investments are going to the developed world I know it never reach at double figures.

Therefore profitability wise Pakistan is an attractive destination. Now what does Pakistan offers as special features to an investor, kindly don’t treat Pakistan as a stand alone country 3 although we have our own market of 150 million people which is very big very large, although it seems smaller because of the presence of India in the East and China in the North, but we consider Pakistan alone a population of 150 people is a very strong population and we do very well on population growth unfortunately, therefore we are rising and the population of Pakistan is on the increase and there is also excellent large market but as I say please don’t see Pakistan as on a stand alone basis. Pakistan is the hub it is at the cross roads of the gulf of Central Asia, of Western region of China of India and South Asia we are in the centre. No interaction between these regions is possible without Pakistan. Central Asian republics are looking all over for excess to the world and there imports have to come from the South that is only possible through the shortest route that is Pakistan. The western region of China is developing tremendously. If it was to travel overland to the Eastern ports of China and our normalization of relations with India, signing of the South Asian free trade area so I think Pakistan is at the centre of business activity and it should be taken as a hub of half the world population. That is the locational importance of Pakistan. On talking of labour I think we have the cheapest labour may be in the world.

I was checking the figures and I found out that the labour cost in Pakistan is roughly about 0.36$ an hour. The labor cost in China is about $ 0.68 an hour and our labour cost with due difference, the Ambassador of India is sitting here, is slightly lesser than India labor cost which is I have been told is about $ 0.48 or $ 0.49 an hour. In Germany it is $ 0.31 an hour just for reference. Therefore labor cost is very cheap in Pakistan. Taking of skilled human resource, we have a lot of skilled human resource. We have qualified manpower. Keeping the atmosphere less tense when I was in one of the Scandinavian countries where a lot of telecommunication interest is being in Pakistan. In expression with the intellectuals they cast one sided expression that our literacy level is low and also questioned about manpower skills to manage telecommunication skills. I said yes indeed our educational level, our literacy level is shamefully low, 50 [%] per cent but those who are educated are brilliant and I said that even if 3 [%] per cent are brilliant excellence, they happen to be more than your population. Therefore don’t worry we have a lot of skilled manpower available in Pakistan and there is no dearth of qualified skilled manpower.

Then there is another issue of investor friendly environment. We run through the environment that the government has created. There is no restriction remittance of profits dividends, capital royalty or fees, loans are available at low interest rates to any foreign investor just like they are available to any Pakistani investor and there is tremendous amount of liquidity in our banks today. There is absolutely level playing field as for Pakistanis for equity ownership, excess to domestic financial market, tax and tariff regimes and legal rules and regulations. They apply to a foreign investor as they apply to Pakistani. We have a network of export promotion zones and industrial estate which we have created now in our major industrial cities they are available to any foreign investor infact we facilitate any foreign investor coming and acquiring land and putting up an industry there.

May I also add that there is only 5 [%] per cent duty on import of machinery and plant. Therefore this the environment that we have created and that is what is drawing investors to Pakistan with security of their capital, with may be one of the highest profitability margins in the world.

Now let me come to the areas of investment in information technology (IT). We have developed an infrastructure which is now excellent, we have increased the internet connectivity from just about 30 cities or towns to about 2,000 cities and towns are now connected through internet. The fiber optics connectivity from another 40 or 50 cities to about 1,000 towns and cities of Pakistan now are connected.

The bandwidth cost that stood at 86 thousand dollars for two mega bytes in 1999 is two thousand six hundred dollars now so this the kind of reduction. There is tremendous capacity in IT. Telecommunication sector is booming in Pakistan in all respects like mobile, WLLs and fix times. Mobile telephones which are now 6, 00,000 only two years back and today they are touching ten million. They will go to 15 million in the next two to three years. Nokia Finland thinks that Pakistan by 2007 will the biggest Nokia market in the world. We are privatizing our monopoly which is PTCL and there are about 18 and 19 buyers the biggest in the world purchasing the PTCL and we have given licenses to Telenor and Warrid in the mobile telephonic sector and it is difficult to find a qualified telecommunication in 4 the market in Pakistan.

In agro based industry we are the fifth largest milk producers of the world but we are not involved in any dairy products like cheese, milk, yogurt and anything. Therefore we are going for agro based industry and in this we have tremendous potential. We are trying to bring about white revolution in Pakistan. We have the best fruits and vegetables and great chances and opportunities are here. There are excellent fish on our coast. I believe we have best shore of Gwadar port and I know Philippine is into fishery. We do not do any fishery and it is negligible. These are the areas where investors could look into. Housing and construction is booming. We have focused on SMEs because we do not want to concentrate on our industrial growth in few ends and we want to disperse the economic gains. Therefore SMEs are specially focused.

We want to undo the increase in oil and gas prices and it can be through reducing our independence on oil which through the IPPs in 1994 stood at 70 per cent of Pakistan’s oil production through thermal. We are changing that ratio. So we are therefore concentrating on hydro electricity and there is possibility of abundance of hydro electricity in Pakistan. We are going for electricity from coal and we have one of the biggest coal reserves in Pakistan. We have gas in Pakistan and we are going to get gas energy from Iran, Qatar and Turkmenistan. We are also going for alternate sources of energy. We have carried our researches and tremendous amount of wind availability in our Southern part. There is a private firm which is already establishing this wind energy and 100 mega watts by December it will be our own generation.

The last area is pharmaceutical. These are the areas of investment focus that are possible in Pakistan. Investors in Philippines for joint ventures or investment need to look at these areas. I know you export to Pakistan chemical, machinery and auto mobile parts. I would suggest that there is a possibility of joint ventures in these areas of establishing these industries in Pakistan taking advantage the hub of Pakistan for exports into the area. I would like to invite investors here to look into possible investments into areas where you already are exporting to Pakistan. With this broad over view of opportunities of trade, commerce, investment in Pakistan and between Philippines, I would like to end by saying that Pakistan looks forward to enhancing its cooperation and bondage with Philippines through commercial, economic and trade ties which will cement more political harmony that already exists between the two countries.

I thank you all ladies and gentlemen.

Advertisements

Responses

  1. Thorough knowledge is provided here about Pakistan Industries.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: