Pakistan, Saudi Arabia may ink $10bn MoUs this month

ISLAMABAD: Pakistan and Saudi Arabia are likely to sign memoranda of understanding for more than $10 billion Saudi investment in Pakistan this month. Pakistan will also sign similar MoUs with China, the United Arab Emirates and Malaysia over the next two months.

This was said in the second meeting on ease of doing business (EoDB) presided over by Prime Minister Imran Khan. The meeting was told that the MoU on investment framework with the UAE was expected next month.

Talking to media after the meeting, Finance Minister Asad Umar said Saudi Prince Mohammad bin Salman bin Abdulaziz would visit Pakistan next month and most of the MoUs were expected to be signed during his trip.

When contacted, Board of Investment (BoI) Chairman Haroon Sharif said Saudi Arabia was interested in Pakistan’s four sectors — oil refinery, petrochemicals, renewable energy and mining. “We are expecting $10bn plus Saudi investment and the MoUs to be signed in this regard will not be common or vague but concrete agreements,” he added.

The $10bn investment will be in addition to the $6bn bailout package given by Riyadh to Islamabad during Prime Minister Khan’s visit to Saudi Arabia in October last year. “According to a survey, 65 per cent of the investments will take place in the country’s commercial hub Karachi and 35pc in Lahore. Therefore, better law and order situation and ease-of-doing-business opportunities were prerequisite for foreign investment,” the BoI chairman added.

He said the government had made it mandatory for all foreign firms to invest in joint ventures with Pakistani firms so that local companies could also get boost and deal with local issues in a better way.

He said Saudi firm Aramco would invest in an oil refinery and was likely to set up its own refinery in Pakistan. “Saudi Arabia is also interested in petrochemicals and will make investment in this sector as well,” he added.

Mr Sharif said there was a big room for renewable energy in Sindh, Balochistan and central Punjab and, therefore, Saudi firm Aqua Power, which controls renewable energy business in Tunisia, the UAE and Jordon, had a comprehensive plan on renewable energy projects in Pakistan.

He said he had recently visited China and signed MoUs on industrial cooperation under the China-Pakistan Economic Corridor (CEPC). “Now we have to build economic zones along the corridor.”

The BoI chief said the UAE was interested in agriculture, housing and other sectors. He added that four Malaysian firms were also due this month and would invest in four sectors — halal meat, gemstone, information technology and hi-tech education.

An official press release issued by the Prime Minister Office said: “Briefing the meeting about various positive developments with regards to investment facilitation, it was informed that an MoU on industrial cooperation has been signed with China last month. The MoU with Kingdom of Saudi Arabia is expected to be signed this month whereas investment framework MoU with the UAE is expected in February 2019.”

The meeting was attended by the finance minister, Adviser to the PM on Commerce Abdul Razak Dawood, PM’s adviser Dr Ishrat Hussain and the BoI chairman.

The BoI chairman briefed the prime minister about the progress on various indicators related to ease of doing business.

The meeting was informed that the number of taxes had been brought down from 47 to 21. “We have clubbed together many taxes to facilitate the business community,” Mr Sharif added.

He said a new system of value added tax refund would be in place by March 31 which would significantly reduce time in obtaining the VAT refund, adding that efforts were also being made to improve the risk-management system to reduce the number of physical audits.

About the ease of starting business, the prime minister was informed that integration of the Securities and Exchange Commission of Pakistan with provincial portals and Employees Old-Age Benefits Institution (EOBI) had been completed in Punjab and efforts were being made to expedite launch of such portal in Sindh.

The meeting was informed that significant progress had been made to facilitate provision of electricity and timely information to the businesses. Besides availability of required documents on website, a full online application system is being rolled out and advance notifications are being ensured about change in tariff, etc.

In the area of getting credit, the meeting was informed that registrar would be appointed by the end of this month and rules under the Secured Transaction Act were being finalised by the Ministry of Finance.

The prime minister emphasised the need for greater focus on addressing issues relating to ease of doing business in Sindh since Karachi was financial hub of the country.

It was decided that regular meetings on EoDB would be chaired by the prime minister with participation of the chief ministers and chief secretaries. It was also decided that dedicated EoDB offices would be set up at federal and provincial levels for the purpose of removing bottlenecks and facilitating investors for smooth business operations.