Dar says prospects for investment in Pakistan are bright

Finance Minister Senator Ishaq Dar while conceding that infrastructure development and terrorism pose major challenges has stressed that the prospects for investment in Pakistan are bright.

In an interview in Tokyo with Japan’s leading economic journal Nikkei Asian Review, Dar said the economic position of Pakistan was fairly unstable (prior to the 2013 general election). That’s why many international institutions stopped working with Pakistan. But the political party headed by Prime Minister Nawaz Sharif – the Pakistan Muslim League – had a very clear road map of how to make an economic recovery. “That is included in our manifesto. We have four E’s: economy, energy, extremism, education and health. Soon after we took the oath of office in June 2013, we pursued very strong structural reforms to fix the economy. They’re always painful, but I’m glad to say that all of our macroeconomic indicators have shown very good performance. We project to attain GDP growth of 5% this year, the third year 6% and the fourth year 7%. So our projected GDP growth is 7% in the 2017 to 2018 fiscal year.”

Asked that Pakistan last year made a splash in the bond market, the finance minister said they took the country back to the international bond market after seven years. “We issued in April a conventional bond, a euro-dollar bond. It was heavily oversubscribed. We offered it for $500 million, and we got $7 billion (worth of orders). By the way, we did not take $7 billion, we took only $2 billion. For sukuk – Islamic bonds – in November we went again to the international market and offered $500 million. We were offered $2.3 billion and we picked $1 billion.”

Asked to comment on his interest to introduce Japanese technology for coal-fired power plants, he said Pakistan had plans for something like a 10,000-megawatt addition in the electricity generation sector, because the supply-demand gap right now was around 4,000MW to 5,000MW. China has indicated that they are willing to finance coal-based generation. If Japanese companies would like to come, they are most welcome.

In reply to a question about security concerns of the investors, Ishaq Dar said under the leadership of Prime Minister Sharif, the government made a very clear public commitment that we will deal with security. He said the Zarb-e-Azb operation is very successful, and it’s still on. It has eliminated the sanctuaries of the terrorists, it has destroyed their ammunition, it has killed almost 1,200 [militants, including] their high-profile leaders.

To a question about China and Pakistan economic corridor project estimated to cost $45 billion, Ishaq Dar said the economic corridor was not going to benefit China and Pakistan alone. It’s going to [bring] benefits to the entire region – to the Central Asian states, India, Afghanistan, other neighbouring countries. Even Japan won’t have to go to the Gulf to get things done if this economic corridor from Kashgar [in northwestern China] to Gwadar [in southwestern Pakistan] is activated. It’s a win-win for everybody. We are quite grateful for China’s support, which they announced. Now we are looking to Japan for an equal package, hopefully.

He said Japan is an old friend. “In Pakistan, we mostly see Japanese cars. Honda is there, Suzuki is there, Toyota, Hino. We are looking forward to the earliest possible visit by the Japanese prime minister to Pakistan.” He said the two countries had a history of bilateral economic and trade relations, and there’s a great scope to expand the ties further.