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A policy is being finalized for the development of industrial
infrastructure development with tax holidays and full duty exemptions on
import of agriculture machinery. Syed Naveed Qamar Pakistan’s Federal Minister
for Privatisation, Investment, Ports, Shipping, Industries & Production stated
while delivering his keynote address at Middle East-Pakistan Agriculture &
Dairy Forum at Dubai today, says a message received here.
The Minister said that Pakistan’s economy was still predominantly agrarian in
nature. Agriculture accounts for 21.6 % of the GDP and 43.4 % of the total
workforce and is the main source of livelihood for 66 % of the country’s
population living in rural areas. It contributes substantially to the
country’s exports. It also provided raw material to major industries such as
textile, sugar, dairy, leather and other agro-based industries as well as
market for industrial products, he stated.
There existed a vast scope for investment opportunities in Pakistan’s Dairy
and Agriculture Sector, which was one of the most important sectors in our
economy and its encouraging potential could be capitalized by enhancing
production and value addition as the strategic location of the country
provided a framework of export avenues for livestock & related products to the
Gulf markets, he added.
He informed that Pakistan was ranked as the 5th largest milk producing country
in the world with annual production of over 40 million tonnes. Livestock makes
a large contribution to the revenue generated by the agriculture sector.
Pakistan has a large livestock resource base and considerable potential for
dairy production & export.
Around 96.5% of the milk is coming from the informal channel, that is the
local milkman and only 3.5% is processed. The informal markets lack vertical
integration. Consequently this presents tremendous investment potential in the
dairy sector. Government policy is aimed at private sector led development of
the livestock and diary sector.
Mr. Naveed Qamar further stated that Pakistan’s livestock products have a
competitive price edge with halal feeding & slaughtering. This provides an
opportunity for investment given our proximity to the Arab markets, which are
not far from Pakistan and were linked with air and sea routes, he said.
Elucidating the vast investment opportunities in Pakistan’s Dairy sector, the
Minister underlined the establishment of the semen production units and termed
it a good investment. Business advisory services for livestock are proposed to
be introduced. Such a service is neither available in the public nor the
private sector. Setting up of livestock business advisory centres providing
animal health and artificial insemination services presents a good investment
opportunity. Specialized milk collection units can enhance vertical
integration in the sector. Related diversification into pharmaceuticals
industry (for animal vaccines) was another area, which provided a potential
opportunity for investment, Mr. Qamar stated.
In his address he informed the participants that Pakistan has a large local
market of over 160 million people and among them 100 million were under the
age of 25 years of age with a large labour force of 45 million workers.
Highlighting the salient features of Pakistan’s incentive based, investor
friendly policies he said Pakistan’s investment policy was the most liberal in
the region. Most of our economic sectors are open to FDI where the foreign
investors can hold 100% equity. Safety of investment is assured and we have
signed Bilateral Investment Treaties (BIT) with many countries worldwide.
Government processes and procedures are being streamlined; a number of
incentives and facilitation measures are being taken for promoting business
activities in Pakistan. These include the network of industrial estates &
export processing zones, economic zones with tax holidays, concessional
customs duty on import of Plant & Machinery and the unrestricted outward
remittances of capital, profits, royalty, technical & franchise fees etc.
Special Economic Zones are proposed to be set up in different parts of the
country. These steps offer immense opportunities for investment in all major
sectors including the diary and agriculture sector.
Pakistan was undergoing significant financial reform process including tax,
trade & tariffs, financial sector & capital markets in addition to
strengthening the regulatory mechanism. All of these are aimed at promoting
de-regulation, investment, transparency in financial operation and good
governance with poverty alleviation as the ultimate goal. In view of the
policies that the government has adopted, many international companies are now
investing in various sectors. A recent study found that MNC’s enjoyed average
return on equity of over 30% per annum, he stated.
He added that Pakistan has declared horticulture as one of the priority areas
being an important sub sector of the agricultural economy. The horticulture
sector has tremendous potential to improve by reducing the yield gap (per
hectare) and post harvest losses through better infrastructure and processing
facilities. Pakistan is producing large quantities of fruits and vegetables,
the bulk of production is marketed locally and significant quantities are
wasted because of lack of appropriate facilities. High post harvest losses are
mainly on account of insufficient packing/grading and cold storage facilities
along with absence of refrigerated transport/containers. After improvement in
post harvest management Pakistan will have a large production surplus to
substantially increase the exports. The Horticulture sector presents an
immense potential and opportunity. Pakistan has a wide range of the basic
natural resources like diverse climatic zones, fertile lands, vast plains, and
well-established irrigation system, which cater to a range of horticultural
crops throughout the year.
Syed Naveed Qamar urged the investors to avail the tremendous available
investment opportunities in Pakistan where highly professional, qualified,
competent and hard working workforce was also available along with a safe
environment and profitable place for future investments and businesses, which
reflected investor’s confidence through the performance of the local stock
exchange, which has been the strongest performing in Asia during the current
year and the second best performing major market in the world.