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At the center of Asian growth

s. 0. At the center of Asian growth. Pakistan becoming Asia’s trade, energy and transport corridor. Land locked energy rich Central Asia. Booming & energy deficit China. Capital & Energy surplus Middle East. Booming South Asia. 2. s. Liberal investment policy.

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At the center of Asian growth

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  2. 0 At the center of Asian growth Pakistan becoming Asia’s trade, energy and transport corridor Land locked energy rich Central Asia Booming & energy deficit China Capital & Energy surplus Middle East Booming South Asia 2

  3. s Liberal investment policy • Equal treatment of local & foreign investors • All economic sectors open to foreign investors • Foreign equity up to 100% allowed • No Government permissions required • Attractive incentives package • Remittance of capital, profits, royalty, technical & franchise fee allowed • Import of raw material for export manufacturing zero-rated • Bilateral Agreements • Investment Protection: 47 Countries • Avoidance of Double Taxation: 52 Countries • Protection of foreign investors through the; • Foreign Private Investment (Promotion & Protection) Act 1976 • Protection of Economic Reforms Act 1992

  4. Doing business in South Asia 2010 • Ease of doing business • Ranking • Singapore • Pakistan • China • Sri Lanka • Egypt • Bangladesh • Russia • Brazil • India • Iran

  5. s Home to over 700 companies Haier Deutsche Bank

  6. s Reform Process • Government strongly committed to restoring macroeconomic stability as well as the confidence of markets and investors • Comprehensive & integrated medium term strategy evolved – “9-point” • program to increase productivity, efficiency & high growth rates • Macroeconomic Stabilization • Social Development, including Social Protection • Agriculture Productivity Enhancement, Agribusiness and Agro Process Promotion and Competitiveness • Industrial Competitiveness • Human Capital Development • Energy • Capital Markets • Public-Private Partnerships for Infrastructure • Institutional/Governance Reform

  7. Pakistan’s Economic Overview • 2.1 % GDP growth (2008-09). • FDI Inflows during 2008-09 ($ 3.7 billion) • Exports during 2008-09 ($ 17.79 billion) • Imports during 2008–09 ($ 34.82 billion) • Forex Reserves ( July 2009) $ 12.23 billion • Worker’s Remittances during 2008-09 ($ 7.81 billion) • 4.7 % growth in Agriculture Sector (2008-09) Cont’d….

  8. Pakistan’s Economic Overview • (-10.8) % growth in Construction Sector (2008-09) • 3.6% growth in Service Sector (2008-09) • (-3.3) % growth in Manufacturing Sector (2008-09). • (-7.7) % growth in Large Scale Manufacturing Sector (2008-09). • 7.5 % growth in Small Scale Manufacturing Sector (2008-09) • 1.3 % growth in Mining & Quarrying Sector (2008-09). • Total investment 19.7 % of GDP for 2008-09 against 22.5 % of GDP for 2007-08

  9. Special Economic Zones (SEZs) • SEZ Act is being framed to create cluster of manufacturing investors with effective and efficient infrastructure to compete globally • Tax Holidays • 10 years for Zone developers • 5 years for investors in the Zone • Duty free imports of plant and machinery • One window facility offered by BOI

  10. Year wise FDI Trendswith Privatization Proceeds 10

  11. Country Wise FDI in Pakistan US$ Millions US$ Millions 11

  12. Country-wise FDI in Pakistan (Jul 09- Feb 10) 12

  13. Sector Wise FDI in Pakistan US$ Millions 13

  14. Sector-wise FDI in Pakistan (Jul 09- Feb 10) 14

  15. Investment Opportunities in Pakistan 15

  16. 25 Oil & Gas Priority Sectors Mining Power IT & Telecom Investment opportunities • Offshore & Onshore Exploration • Refining • Pipelines • Storages • Coal • Granite • Marble • Copper • Semi-Precious Stones • Hydel • Thermal • Coal • Solar • Wind • Biogas • Call centers • Cell phone • E-Commerce • Software • IT Parks

  17. s Infrastructure Priority Sectors Tourism SMEs Agriculture Investment opportunities • Ports & Roads • Urban Mass Transport • Water supply & • Sanitation • Housing • Desalination • Textiles • Leather • Electronics • Furniture • Gemstones • Food Processing • Sports & Surgical goods • Value added textiles • Hotels • Resorts • Theme Parks • Cultural tourism • Entertain-ment Centers • Agri-Business • Livestock & Dairy • Corporate Farming • Fisheries • Fruits & Vegetables • Seed Production • Storages

  18. s Privatization Priority Sectors Housing Chemicals Engineering Investment opportunities • Oil & Gas • Infrastructure • Power • Industry/ Real Estate • Banking • Pesticides • Dyes • Agro Based • Mineral Based • Synthetic Fiber • Pharma-ceuticals • Petrochemical • Complex/ Naphtha • Cracker • Golf City • Water City • Sports City • Media City • Residential Complexes • Office apartments • Light & Heavy Engineering • Automobiles • Auto parts • Agriculture Machinery • Steel Production • Textile Machinery

  19. s Energy Sector

  20. 5 Pakistan’s Energy Supply Percent • Pakistan energy supply mix • LPG • Coal • 0.5 • 7.4 • Others • Gas • Oil

  21. s Investment opportunities in Fuels • Untapped1 • (%age) • Potential Oil sector (Million TOE) • 20.10 • 5.93 • (32.1%) • Exploration and Production, Refineries, Pipelines, Distribution Gas Sector (Million TOE) • 30.24 • 14.84 • (49.1%) • Exploration, Compression, Transportation, Distribution, Storage Coal Mining (Billion Tons) • 187 • 99.9%2 • Exploration, Extraction, Gasification, Integrated Power Generation 1 Large Untapped Potential in Coal, Gas & Oil 2 Single largest untapped coal reserve of 175.5 billion tons in Thar, Province of Sindh SOURCE: Pakistan Energy Yearbook

  22. 5 Electric Energy Potential MW Current Installed Capacity 19,522 MW Energy Wind 364,000 • Total Thermal 54% • Private Sector 41% Solar 2,900,000 • Nuclear • 3 Biomass 2,000 • Oil • Hydel • 35 Coal 100,000 Hydel 47,500 • Gas Current Gap 4,500 MW Demand 2020 – 54,400 MW 2030 – 113,700 MW SOURCE: Private Power & Infrastructure Board, Government of Pakistan

  23. s Investment opportunities in Energy • Hydel: • Water Storage/Irrigation Network • Conjunctive Hydro Power Generation • Run of the River • Low Head Hydels • Integrated CBM/Coal & Power Generation Project • Renewable Energy Generation • PPP on BOO & BOOT basis • Incentivized Packages for Investment with Security/ Protection Arrangements

  24. Investment Opportunity In Oil & Gas • Pakistan can be a likely hub for E&P activities and become Energy corridors in the region. • Pakistan is a gas prone country after making a commercial discovery the lead time to develop the gas field is 3-5 years depending on terrain and infrastructure. • Petroleum policy 2009 has been promulgated where in further incentives have been provided to attract local and multi-national companies for investment in oil/gas sector of Pakistan.

  25. s InfrastructureTransport & Communication Sector

  26. s • Total Track(Km) • 11,246 • Locomotives • 540 • Freight Wagons • 20,724 • Passengers Carried(Thousands) • 79,984 • Freight(000 tonnes) • 7,234 Railways Sector overview SOURCE: Pakistan Statistical Year Book 2009

  27. s • Proc/manu of DE locos • Proc/manu of HD wagons • Doubling • Replacement of obsolete signaling system • Replacement • Regional linkages • Rehabilitation • New track • High speed train (Karachi-Peshawar) 1 2 4 5 3 7 6 8 9 • Overhauling of locos 10 Railways investment proposals • Areas • Kilometers • 300 • 700 • 500 • 800 • 1,650 • 5-10,000 • - • 3,500 • 150 • 27

  28. s Khunjrab Pass Sust CHINA Karimabad Chitral GILGIT S-1 N-35 Sazin Chilas Drosh Dasu Skardu Dir Jalkhad N-15 N-45 Naran Malakand Kashmir (Disputed Territory) Muzaffarabad M-3, P/Bhattian -Faisalabad (54 Km) Completed TORKHAM Mansehra S-2 M-1 Nowshera N-75 Murree Parachinar PESHAWAR ISLAMABAD Kohat N-80 N-5 Bannu M-4, Faisalabad - Khanewal (184 Km/ADB/GOP) AFGHANISTAN Kharian N-55 Sarai Gambila M-2 PINDI BHATTIAN Dera Ismail Khan Mughal Kot M-3 Malana Wahgah Zhob LAHORE FAISALABAD N-50 M-5, Khanewal – Sukkur (524 Km/WB) Chamman Qila Saifullah Retra Okara M-4 N-70 Kuchlak Mianchannu Multan Loralai D. G. Khan QUETTA KHANEWAL Muzaaffargarh Mastung N-55 M-6, Sukkur - Shikarpur (37 Km/ADB) Sibi Nushki Bahawalpur Dadhar Taftan Dalbandin Rajanpur Kalat Nok Kundi N-5 Nuttal N-65 Dera Murad Jamali N-40 Surab Rahimyar Khan Jacobabad INDIA M-6, Shikarpur – Ratodero (50 Km/ADB) Ubauro SHIKARPUR Basima Khuzdar N-85 IRAN RATODERO Larkana SUKKUR Nag Wad Kakkar M-8 M-8 Kotri Kabir N-25 panjgur Moro N-5 DADU M-6, Ratodero – Dadu (150 Km/GOJ/GOP) Turbat Awaran Bela Sehwan Hoshab N-55 Hala Uthal M-7 N-10 Gabd Liari Hyderabad Pasni Jiwani M-9 M-7, Dadu – Dureji – Karachi (250 Km/ADB/GOP) Kotri Gwadar Ormara N-5 KARACHI Thatta ARABIAN SEA National Trade Corridor Peshawar – Torkham (51 Km/ADB) Peshawar Northern Bypass (34 Km/ADB) M-1, Islamabad – Peshawar (154 Km/GOP) Ongoing M-2, Pindi Bhattian - Islamabad (243 Km) Completed Wazirabad – P/Bhattian (100 Km/WB) Upgradation Of KKH (806 Km/GOP/China/ADB)

  29. s • Description • Km • Total Network • NHA Network • Provincial Roads • District Roads • Urban Roads • 260,000 • 11,485 • 101,000 • 94,150 • 54,000 National Highway network Khunjerab Pass • NHA Network • Only 4 % of total network • Carries 80% of commercial traffic • N-5 carries 65% of this load Gilgit S-1 N-35 N-45 S-2 PESHAWAR N-15 N-75 M-1 N-80 M-2 Indus River CHAMAN Jhelum River N-55 N-50 M-3 LAHORE M-4 Ravi River QUETTA TAFTAN N-70 N-5 M-5 N-40 N-65 M-6 N-85 N-25 N-5 M-8 GABD M-7 N-10 GWADAR M-9 KARACHI Hub

  30. s NHA – PPP Program and Modalities • Public Private Partnership for overcoming public sector finance limitations, introduce improved technology/skills and management practices and obtain operational efficiencies • Motorways, highways, tunnels and road structures identified for PPP investment • Modes of PPP participation include Build, Operate & Transfer (BOT), Finance, Manage, Operate & Transfer (FMOT), Operating Concessions (OC) • Establish legal framework and investment packages/arrangements

  31. s Airport Infrastructure • Major airports: Karachi, Lahore & Islamabad • Secondary airports: Peshawar, Quetta, Multan, Faisalabad, Sialkot & Sukkur • Several regional airports • Air craft movements at airports (000) 197,486 • Passengers handled (million) 141.2 • Cargo (million tonnes) 31.6 • Mail (million tonnes) 5.3 • Investment Opportunities: • New airports/upgrading of existing airports • Cargo terminals/villages • Outsourced operations, facilities and services • MOB for aircrafts at Karachi

  32. s Ports and Shipping • Main ports: Karachi, Qasim and Gawadar • Port entries: 3372 vessels with registered tonnage of 50 million tonnes • Cargo handled 64.8 million tonnes • Cargo in containers 5.9 million tonnes • Investment opportunities • Cargo villages & industrial parks • Container terminals • Outsourced operations, facilities and services • KPT enclave • Miscellaneous supporting infrastructure

  33. s Agriculture sector

  34. s • 5 years avg. growth • Export share • Dependency • Share in value added • GDP Share: • (Crops-46%, Livestock-52%, Fisheries-1%, Forestry-1%) • Employs • 4.1% • 51% • 66% of total • 21% • 44% of labor force • 66% of pop. • Seed Cotton • Sugar • Wheat • Rice • Basmati • Irri • Maize • Fruits & Vegetables • 6-7 • 3-4 • 21-23.5 • 5-5.5 • 2-2.5 • 2.8-3 • 2.8-3.2 • 13-14 • Agro-ecological diversity • 90% prod. from irrigated agriculture • Inefficient irrigation water usage • High post harvest losses • Grains: 5-10% • Fruits & Vegetables: 30-40% • Inadequate storage and cool chain infrastructure Agriculture sector overview • Production1 • (Million tons) • Crop SOURCE: Economic Survey 2008-09

  35. s Investment opportunities in Agriculture • Horticulture investments • Farm equipment/machinery & pressurized irrigation systems • Commercial production of olives, edible oil seeds, tea, herbs and cut flowers • Certified seed incl. hybrid/BT seeds & Nursery Production • Silos/Warehouse Storages (30-35 million tonnes) • Absence of wholesale markets and commodity exchanges Production • Hybrid seed & plant material • Vegetables under green houses/plastic tunnels • Herbs & flori culture Processing • Dehydrated fruits & vegetables • Juices, concentrates & pulps • Canning & frozen packaging • Tomato paste • Essential oils Infrastructure • Cool chain systems • Export houses • Packaging technology

  36. s Investment opportunities in Livestock • Livestock investments • Product • Production • Commercial dairy farming/ processing plants • Establishment of modern slaughter/ abattoirs • Dedicated livestock farms and calf fattening for halal meat production • Sheep goat rearing for Hajj • Camel breeding farms • Veterinary & lab services • Feed mills & fodder prod. • Silage facilities • Cool chains • Milk (b of Lts) • Beef (m of mt) • Mutton (m of mt) • Hide & Skins (m of mt) • Poultry Meat (m of mt) • Eggs (billion) • Livestock product export • 5 years avg. livestock growth • 3rd largest milk producer • Only 3-4% milk processing • Demand increasing • Milk • Red meat • Poultry meat • 42.2 • 1.6 • 0.6 • 47.5 • 0.6 • 10.7 • $457m (3.2%) • 4.6% • 12-13% • 2-5% • 14-15% SOURCE: Economic Survey 2008-09

  37. s Investment opportunities in Fisheries • Salient features • Investment potential • Coastal and inland aquaculture • Hatcheries & fish breeding farms • Exploitation of cold water fisheries • Market & other infrastructure • Promotion in domestic market • Upgrading of Karachi/Korangi fish harbors & fishing fleet • New fish harbors at Pasni & Gawadar • Value addition and fish processing with compliance on international quality & health standards • Share in GDP: 1% • Production: 565,000 tons (60% marine captured) • Consumption per capita: 1.8 kg per year • Exports: $160-200 million • Export potential: in value added form $1 billion • Coastline: 1,146 km’s • Inland water bodies: 4.5% of the total area

  38. Overview • Pakistan is the 4th largest cotton producer. • Pakistan is the 3rd largest cotton consumer. • Main driver of export for the last 50 years. • Investment of US$ 7.5 billion over the last ten years.

  39. Pakistan’s Principal Textile Exports

  40. Incentives • Availability of internationally acclaimed raw cotton • Dedicated Textile and Garment ‘Cities’ • Reduction of import duty to 5% on textile machinery • and parts and ginning presses • Research and Development (R &D) support of 6% • Turnover tax reduced to 1% and Sales tax reduced to • 2%

  41. Investment Opportunities • Land is available at; • Karachi Garment City, Lahore Garment City and Faisalabad Garment City to develop the following industries: • Light engineering factories • Textile industries • Garments Industries • Ginning Factories • Power Looms • Carpet Industry

  42. IT & Telecom Sector

  43. Emerging IT & Telecom Boom • 97 Million cellular users & growing • More than 19 million internet users • Above 688,373 Broadband subscribers • Total direct and indirect jobs in Telecom sector are 1.36 million • Pakistan emerging regional traffic hub for Middle East, Afghanistan & Central Asian Republics 44

  44. I.T & Telecom - Incentives 100% foreign equity allowed in software houses Minimum US $ 0.15 million investment is required in service sector Piracy laws to protect software Tax holiday on software exports till 2018 0-5% Custom Duty on imports of PME Initial Depreciation allowance is 50% of PME Cost 45

  45. I.T & Telecom Development Software Technology Parks Medical & Legal transcriptions IT Law (digital signatures, e-commerce, Secure comm.) Task forces & synergies (Health, Agri, Call Centers, Women in IT, IT & Poverty Alleviation, Venture Capital etc.) Education (Virtual University, IT Universities, IT faculty training, IT curriculum for class IX- onwards) 46

  46. Investment Opportunities in - IT • E- Government Projects • ` IT Enabled Services • Call Centers • Back Office • GIS Mapping (geographical information system) • Software Design/ Testing • Industrial Automation Projects Cont’d…. 47

  47. Investment Opportunities in - IT • Content Development • Software Products • Distance Learning / IT Education & Training • Electronic Media • Information Security • Bureau Services • Hardware and Internet Equipments 48

  48. Investment Opportunities In Telecom • Upgrading the Billing Systems • Rural Telecommunications • Value Added Services & Content Services • Data Communications • Internet Protocol Television • Vehicle Tracking System • 3 G / 4 G Networks • Low Fixed Line Teledensity • Advent of Mobile Banking Cont’d…. 49

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