Amanat Ali Chaudhry
Two-day International Seminar on Business Opportunities organised by the Punjab government brought together over 250 businessmen, investors, consultants, entrepreneurs, and development practitioners from the foreign countries, and about the same number from Pakistan.
The purpose of holding the international seminar was to showcase investment potential in six major sectors of the province’s economy: energy, transport, mines and minerals, housing, industrial estates and infrastructure.
Among others, the seminar was attended by relevant persons from technology-rich countries like the UK, Germany and Switzerland, but mainly from China and Turkey. It provided a unique opportunity to the international and local investors and businessmen to share their perspectives and experiences on the investment opportunities in Punjab. The activities of the seminar were structured in a manner as to allow maximum interaction and flow of information.
An unprecedented shift is underway in the world today whereby global economic redistribution is taking place surely but steadily. The observers of the world economic order agree that the gap between developed and the developing countries is shrinking to the advantage of the developing world.
Based on sustainable growth of their economies, China and India have been tipped as the engine of growth for world economies. Turkey, currently situated at 17th position on the world economic ladder, is set to go high up the order. The Chinese economic turnaround is most instructive as the country has succeeded in maintaining consistently high growth rates over the decades and lifting millions of people out of poverty trap.
Regional trade, being a significant part of the global trade, holds the key for prosperous future for countries of the region. The South-South cooperation has now begun to draw the attention of the region’s political leaders and policy makers by virtue of its immense development potential for the member countries.
The presence of such shared regional challenges as poverty, unemployment, low economic growth, digital divide, backwardness and huge educational disparities shows that our level of mutual cooperation has not been up the mark. This is both a cause of concern as well as an opportunity to step up our efforts for more robust economic partnerships.
In today’s world, it is not the government’s business to be in the business. Private sector has the most crucial role to play in spearheading the economic activity. The government’s job is to provide enabling environment by lending a supporting hand to the private sector. Hence, strong public-private partnership offers the way forward to achieve our collective goal of optimally capitalising on economic potential.
For this international seminar, the Punjab government showcased six sectors. A brief view of each sector is given below which shows their investment potential.
Firstly, massive and unprecedented infrastructure development is underway in Punjab. China-Pakistan Economic Corridor, Lahore-Karachi Motorway, Orange Line Metro Train, and energy projects are some of the mega projects on which work is underway. Likewise, Khadam-e-Punjab Rural Roads Program is the biggest project for rehabilitation and construction of rural road network.
Besides creating connectivity, it will transform the socio-economic landscape of agrarian hinterland by facilitating farm to market access. Punjab is the largest and most industrialised province. In order to meet its growing economic needs, its physical infrastructure will need to be upgraded and developed commensurately.
Secondly, minerals of Punjab provide resource base for the industrial sector. The province has world’s largest Rock Salt deposits in Salt Range. 35 minerals are undergoing the process of excavation, whereas 56 leases have been given to large corporations and multinationals for industrial production.
Punjab has 600 million tonnes of Bituminous coal and abundance coaly shale for power generation in addition to having 1,000 MT of iron ore deposits suitable for steel making. Key investment opportunities lie in development of metallic mineral resources, coal-based power generation and establishment of cement, chemical, glass, and ceramics plants.
Thirdly, Punjab is the most populous and urbanised province of Pakistan with a population of 100 million people. About 32% of the province’s population in urban areas and cities and at the current growth rate, the population living in cities is likely to be 39% by coming decade. It creates a massive need for development of the transport sector to cater to increasing travel needs of burgeoning population. Punjab’s cities are commercial and trade hubs. The government has adopted public-private partnership (PPP) and Build-Own-Transfer (BOT) method to finance development of transport projects. This makes transport sector highly attractive for investment.
Fourthly, housing is a basic human need. Punjab is in the midst of an urban transition due to population growth and rural to urban migration. There is also a shift towards manufacturing and service based economy, which is associated with urbanisation. According to Urban Growth Strategy developed by Punjab, massive investment is needed in the housing sector to come closer to addressing the increasing demand of housing. The cities can be turned into engine of national growth and centres of economic activity and knowledge provided they are developed along the modern lines by incorporating the world best practices. There is a vast gap between increasing demand and limited availability of housing facilities. This gap can only be bridged if the private sector takes the lead and invests its capital in this vital sector.
Fifthly, the development of industrial estates or industrial parks is central to expansion of Punjab’s economy. After the grant of GSP plus status to Pakistan, the country’s exports have registered phenomenal increase thereby fetching much needed foreign exchange. Textile, being the largest export item, is mainly based in Punjab. For this purpose, 10-year income tax holiday has been given coupled with duty free imports of machinery or capital goods.
Sixthly, Pakistan’s economic growth has suffered hugely on account of persistent energy shortfall. Assured generation of affordable, and environment-friendly electricity is need of the hour to cater to rising demand of industry, economy and population. After the 18th Constitutional Amendment when the provinces were allowed to generate their own electricity, a number of coal, solar, wind and RNLG-based power projects have been started. The potential investors will get attractive returns on their investments in energy sector in Punjab:
* 17% return on equity on renewable energy projects
* 20% for projects on local coal
* 17% for projects on imported coal
* 17% for hydropower projects
There is only 5% customs duty on import of plant and equipment not manufactured locally. There is no duty on renewable energy plants and equipment. Huge investment opportunities await investors in coal-powered, solar, wind and small hydel power projects in Punjab.
The world is changing fast. We need to change accordingly to stay afloat. Thanks to globalisation of commerce and trade, word ‘countries’ is being replaced by word ‘economies’ wherein the role of trade bodies and private sector has increased tremendously. Being the catalyst of economic development, the private sector is required to play an important role of a contributor to economy.
The Punjab chief minister’s resolve of enhancing transparency, promoting efficiency, reducing bureaucratic hassles, and simplifying procedures was noteworthy as investment friendly regime allows the investors space to strategise and plan expansion of their businesses.
The seminar was a serious attempt on the part of the Punjab government to highlight its investment potential. It definitely helped the investors to develop an insight and long-term picture about huge untapped investment potential in Punjab. Other provinces are advised to follow the suit.