China to set up a large steel factory in Pakistan
With improved law and order situation in the country, foreign investors are looking for finding different areas of cooperation to make investment. Currently, Pakistan was providing all necessary facilities to entrepreneurs who were making investments in Pakistan.
Pakistan offered great opportunities for investment in its energy generation and infrastructure projects and that was the reason, international investors are looking toward Pakistan where time is ripe to make investment for handsome gains.
Pakistan remained focused and committed to implement China-Pakistan Economic Corridor (CPEC) which is a mega project of $46 billion, and is set to provide major support for development of infrastructure in coming years.
As a result of economic decisions, the country has achieved significant improvements in all major economic indicators, as well as a stable economy and improved security, law and order situation in Pakistan. Today Pakistan offers enormous opportunities for profitable investment and trade.
Highlighting the improved areas of country’s economy, official sources told PAGE that inflation is now well below 3 percent, the lowest in 47 years of Pakistan history while its economy was back on an upward growth trajectory and FY 2015 16, saw growth of 4.71 percent, the highest in a decade.
The government has also successfully auctioned 3G and 4G spectrum licenses, opening vistas of communication and data transfer in the country. During FY 2016, foreign direct investment was US$ 1.9 billion with growth of 106 percent, the sources added.
As per data made available to this scribe, major inflow of FDI is from China, US, Hong Kong, UK, Switzerland, Italy, Norway and UAE. Oil & Gas exploration, financial business, power, communications and chemicals remained major sectors for foreign investors. The successful completion of the IMF program was a strong indicator of the health of Pakistan’s economy and the authenticity of reforms undertaken.
Pakistan announced a three-year road map to improve its global ranking on doing business earlier this year. Consistent with that, the country completed three reforms in the past year in Registering Property, Getting Credit and Trading across Borders. The highest number in a single year over the past decade.
Since Pakistan was blessed with huge energy resources (over 60,000MW of hydel potential, 340,000MW potential for wind energy and potential of 2,324 million MW for solar thermal & photovoltaic systems), investment in power sector is coming. In addition, 105 trillion cubic feet of shale gas reserves and 9 billion barrels of shale oil reserves are yet to be tapped. Furthermore, the country is fortunate to have 185 billion tonnes of coal reserves which can be used for power generation as well as diesel production.
Acting Chinese Ambassador to Pakistan, Zhao Lijian has said that his country would set up a large steel factory at Gwadar to further expedite economic developments being carried out under China-Pakistan Economic Corridor (CPEC) framework.
“Both China and Pakistan would very soon sign an agreement to establish the steel factory, three times bigger than the free economic zone being set up in Gwadar city,” he said, adding: “Industrial cooperation was the forth pillar of CPEC initiative. After completion of energy projects, transport infrastructure and development of Gwadar port, industrial cooperation between China and Pakistan will be the main areas.”
Talking about different energy project being completed under CPEC initiative in different parts of Pakistan, he particularly mentioned about the coal-based power plants which were being built in accordance with environmental standard set by the World Bank (WB) and other concerned international organizations. He said China produces around 60 percent of its total power generation through coal-based power stations using modern and state-of-the-art technology.
Zhao Lijian pointed out hydro power plant, coal-based power plants, wind power plants and solar based power plants were being set up to meet the electricity shortage in Pakistan. He informed that the Karot Power Plant was being financed by the Silk Bank established by the Chinese government. The ground braking of Suki Kinari, Kohala Hydro Power Project would be held early next year, he said and added, Sahiwal Power Plant and Port Qasim Power Plant would be completed by next June and December respectively.
He said, a power plant set up at Thar coal site would also be inaugurated in next June.
He said, HUBCO power plant, one of the biggest coal-based power plant, would provide constant and stable power supply throughout the year. He said, the 50MW wind power plants and the 100MW solar power plant set up at Balochistan would boost the power production and hoped there would be no load shedding in Pakistan after completion of all energy projects.
On the other hand, the government would spend Rs20 billion over next three years to enhance Pakistan’s export competitiveness and institutional strengthening under Strategic Trade Policy Framework (STPF) 2015-18.
Export enhancement plan
The sources said total volume of Pakistan’s exports in terms of billion dollars was 24.5 during 2013 and 20.8 during 2016. Highlighting the steps taken by the government to enhance exports, the sources said a sales tax zero-rating regime for five export oriented sectors, i.e., textile, leather, carpets, surgical and sports goods has been introduced with from July this year.
The other steps were establishment of Export Promotion Council for Pharmaceuticals & Cosmetics, and Rice Export Promotion Council, support for import of plant & machinery to strengthen supply chain and encourage value addition and Performance Based Incentive (PBI) to offset burden of higher utility costs and local levies and taxes on export sectors, i.e. per unit price based refund a 4% of 10% over last year’s exports.
The sources said under short-term export enhancement measures, four product categories i.e. Basmati rice, horticulture, meat and meat products, and jewellery, are being focused with parallel focus on markets including Iran, Afghanistan, China and European Union.
According to Federal Minister for Planning, Development and Reforms, Ahsan Iqbal, Pakistan has assumed new identity due to economic turnaround during the last three years under the leadership of Prime Minister Muhammad Nawaz Sharif. “Today we live in the world of brands and every country is a brand. The way our people project Pakistan, becomes its identity and brand,” he said.
With the economic turnaround and unprecedented foreign direct investment of $46 billion under CPEC, Pakistan has already assumed a new positive identity and brand in the eyes of the world. “The international media that used to label Pakistan as the most dangerous country in the world, is now bullish on Pakistan and calling it the next emerging economy of Asia,” he said.
Giving economic overview of the country the minister said, “In the last three years, the economy has seen a steady growth from 2.5% in 2013 to 4.8% last year, which is the highest growth rate in the last eight years. Our foreign reserves with $24 billion are at the highest in the history of Pakistan. This economic take off has changed the perception of the world about Pakistan. The same Moody’s that downgraded the US, has upgraded the credit rating of Pakistan.”
Ahsan Iqbal spoke about the China Pakistan Economic Corridor (CPEC) and said the CPEC would turn Pakistan’s geo strategic location to its geo economic advantage. Within three years, the first convoy of goods has successfully travelled from China to Gwadar through Western route that has made CPEC operational.
All provinces of Pakistan as well as the entire region would benefit from CPEC. The energy projects, infrastructure projects and industrial zones along the Western and Eastern routes would promote connectivity and bring about unprecedented economic growth.