Foreign investors: Confidence flags in wake of political turmoil

[Edevelop]

ISLAMABAD: The assassination of two-time prime minister Benazir Bhutto in 2007 dealt a major blow to the investment climate in the country, following which no major capital inflows were recorded in the tenure of Pakistan Peoples Party (PPP) government, which ran the country from 2008 to 2013.

When the current Pakistan Muslim League-Nawaz (PML-N) administration took over in June 2013, the flagging confidence of investors, however, got a boost and the country saw some interest in capital injection.

To woo the investors, the government assured them of consistency of policies drawn up by the previous PPP administration, winning the trust of many. However, recent political turmoil because of an anti-government campaign, led by the Pakistan Tehreek-e-Insaf (PTI) and Pakistan Awami Tehreek (PAT), may impede the flow of future investment.

China, a major potential investor which looks for ways to assist its friends and support its own slowing economy, has committed to investing $50 billion in a host of sectors including energy in Pakistan. In the first priority list, it has accorded approval to 14 power projects, which will come on stream by 2017-18 and generate 10,400 megawatts of electricity.

The Chinese government has also taken over operational control of Gwadar Port – a region which will help propel economic activities across Pakistan.

Separately, in response to a tender floated by Pakistan State Oil for securing liquefied natural gas (LNG) supplies, three international energy giants – Royal Dutch Shell, British Petroleum and Mitsubishi – have submitted offers.

These all came as a result of political stability in the wake of smooth transfer of power from one democratic government to the other through the electoral process.

Factors that matter

The major factors the investors consider while making their investment decisions are political stability and consistency of state policies in an effort to work in an investment-friendly environment.

However, the recent political chaos fuelled by anti-government protests by Imran Khan’s PTI and Tahirul Qadri’s PAT may once again spark tension and drive away investors, who are keen to pump money into the energy sector to overcome shortages. The uncertain conditions in the country could also block coming investment in other sectors of the economy.

Intervention of courts in investment matters and poor law and order situation have already upset the investors as some energy companies like British Petroleum, Chevron and Canada-based Niko Resources have wrapped up their operations in Pakistan.

For now, it appears that the government’s business and economic activities have virtually come to a halt in the face of upcoming Azadi and long marches to protest alleged rigging in last year’s elections and killing of PAT supporters in Lahore’s Model Town. Pakistan, which has already seen several companies pull out of the country, appears to be losing more foreign investment because of political instability.

Earlier, when the PML-N government took power, many countries including the US and UK showed trust in its policies, believing it would bring political stability and stimulate investment. But the stability has disappeared in no time, putting at stake future investment flows into the country.

Plans on the back burner

The investment plans of foreign players are put on the back burner at a time when the government is grappling with power shortages, which lead to prolonged outages. Though the government has started many energy projects with Chinese assistance, it seems that the sector does not feature among its immediate priorities.

With people facing hours-long outages, the government looks more focused on Metro bus projects, even neglecting the health and education sectors. The 2014-15 budget was also described as pro-elite and squeezed the masses with an increase in inflation.

Experts warn that the country may lose billions of dollars in investments in the energy sector if the current political turmoil is allowed to drag on.

To tackle the energy crisis and boost supplies, there are plans to enter the LNG market and prepare a shale gas policy. New projects including coal, natural gas, LNG and shale gas could bring billons in investment.

The political situation could turn positive if major political parties show maturity and move towards reconciliation to achieve stability and bring investment. Otherwise, even domestic businesses will look for ways to shift capital to other countries, which are politically and economically stable and welcome investors with lucrative incentives.

Published in The Express Tribune, August 11th, 2014.

Foreign investors: Confidence flags in wake of political turmoil – The Express Tribune

 

[Viper0011.]

ISLAMABAD:
When the current Pakistan Muslim League-Nawaz (PML-N) administration took over in June 2013, the flagging confidence of investors, however, got a boost and the country saw some interest in capital injection.

To woo the investors, the government assured them of consistency of policies drawn up by the previous PPP administration, winning the trust of many. However, recent political turmoil because of an anti-government campaign, led by the Pakistan Tehreek-e-Insaf (PTI) and Pakistan Awami Tehreek (PAT), may impede the flow of future investment.

China, a major potential investor which looks for ways to assist its friends and support its own slowing economy, has committed to investing $50 billion in a host of sectors including energy in Pakistan. In the first priority list, it has accorded approval to 14 power projects, which will come on stream by 2017-18 and generate 10,400 megawatts of electricity.


Separately, in response to a tender floated by Pakistan State Oil for securing liquefied natural gas (LNG) supplies, three international energy giants – Royal Dutch Shell, British Petroleum and Mitsubishi – have submitted offers.

These all came as a result of political stability in the wake of smooth transfer of power from one democratic government to the other through the electoral process.

Earlier, when the PML-N government took power, many countries including the US and UK showed trust in its policies, believing it would bring political stability and stimulate investment. But the stability has disappeared in no time, putting at stake future investment flows into the country.

Same stuff I've been preaching on here for many months now. Read the bold part. The benefits of these projects and the cash flow will start to show results in Pakistan's economy, electric & energy sector and all, within the next 2 years, if the current system which brought the investors in, can stay in tact and can provide more confidence to the investors so they can invest more. But sad to see people wanting violence which in every aspect destroys their own country, its name, economy, the political system and people's lives, let alone foreign relationships and reputation. I can never figure this out!

 

[Kompromat]

Same stuff I've been preaching on here for many months now. Read the bold part. The benefits of these projects and the cash flow will start to show results in Pakistan's economy, electric & energy sector and all, within the next 2 years, if the current system which brought the investors in, can stay in tact and can provide more confidence to the investors so they can invest more. But sad to see people wanting violence which in every aspect destroys their own country, its name, economy, the political system and people's lives, let alone foreign relationships and reputation. I can never figure this out!

This feud is bigger than economy. The Nawaz Sharif administration has lost its mandate by denying his people their constitutional rights to peacefully march for their grievances can be heard. He has locked down all major cities, called in Paramilitary, invoked article 144 and 245, effectively establishing a state of emergency. It is now illegal to have a gathering of 5 or more citizens. No progress can take place under such a draconian govt.

 

[Viper0011.]

This feud is bigger than economy. The Nawaz Sharif administration has lost its mandate by denying his people their constitutional rights to peacefully march for their grievances can be heard. He has locked down all major cities, called in Paramilitary, invoked article 144 and 245, effectively establishing a state of emergency. It is now illegal to have a gathering of 5 or more citizens. No progress can take place under such a draconian govt.

Aero - You and I both know the types of threats being issued by the leaders you guys support. It is ALL over the Western media, one idiot's followers have killed policemen, the second one is issuing threats on constant basis for the past many months.

If a fake phone call is made with a threat to any nation, cities, airports and what not are shut down and people evacuated for hours or days until it is determined that the public safety is not in jeopardy. But here, issuing threats to take over the capital, take over the government, revolution and violence is a joke and a casual thing? Since when any political party and its followers can threaten so many things I described above? And you'd imagine that the government won't try to put in security forces and procedures in place to avoid violence that has already taken lives of innocents?
You have an Australian flag in your signatures. Tell me if someone made a call (a fake one), to the City of Sydney and told them that a few people's lives were in harms way.....what would happen? They'd lock down the city, investigate the issue and will keep the area secured till everyone's safety is assured. That's any elected government's job as its a civilized society.

Here, the entire country, a system, its 200 million people,the capital of a country, economy, international relations and everything else is being put at risk (and people have already been killed, including policemen and others). Is that definition of a civilized society? and what would you expect from the government? Not to do anything or take precautions to what has already been declared a a violent process to take over the capital and the government?

Protest is your right but violence is not, and threatening to take down the government, to kill others, to take over a country's capital and to threaten police, justice system, etc .....is not aright. It should be a crime like it is in the rest of the world. What legacy are you leaving for your next generation? Violence to get to power?

If I was IK and I believed I was given the short end of the stick, I'd run a SAFE and PEACEFUL public campaign for the next five years everywhere in the country. To a point where everyone knows what happened. Next time around, people would act on it and will make sure they vote for the right person and the party. If this happens again and IK doesn't get help from the courts, etc, then he can call for further sittings and long marches and stuff. Putting people in harms way isn't right and no one can justify it and in this case, many killings have already happened, including Policemen and government officials.
Please don't come back with justifying that Police started anything first. I've seen videos everywhere and on the media. You can see how violent and gangster type of extremist people are destroying public and state property and including kidnapping policemen and at times killing them.
I don't have any affiliation with anyone. It's sad to see Pakistan burning up when there are many other non-violent ways to solve these issues that under any circumstance, aren't above the safety, security, economy and your nation.

 

[Kompromat]

Aero - You and I both know the types of threats being issued by the leaders you guys support. It is ALL over the Western media, one idiot's followers have killed policemen, the second one is issuing threats on constant basis for the past many months.

If a fake phone call is made with a threat to any nation, cities, airports and what not are shut down and people evacuated for hours or days until it is determined that the public safety is not in jeopardy. But here, issuing threats to take over the capital, take over the government, revolution and violence is a joke and a casual thing? Since when any political party and its followers can threaten so many things I described above? And you'd imagine that the government won't try to put in security forces and procedures in place to avoid violence that has already taken lives of innocents?
You have an Australian flag in your signatures. Tell me if someone made a call (a fake one), to the City of Sydney and told them that a few people's lives were in harms way.....what would happen? They'd lock down the city, investigate the issue and will keep the area secured till everyone's safety is assured. That's any elected government's job as its a civilized society.

Here, the entire country, a system, its 200 million people,the capital of a country, economy, international relations and everything else is being put at risk (and people have already been killed, including policemen and others). Is that definition of a civilized society? and what would you expect from the government? Not to do anything or take precautions to what has already been declared a a violent process to take over the capital and the government?

Protest is your right but violence is not, and threatening to take down the government, to kill others, to take over a country's capital and to threaten police, justice system, etc .....is not aright. It should be a crime like it is in the rest of the world. What legacy are you leaving for your next generation? Violence to get to power?

If I was IK and I believed I was given the short end of the stick, I'd run a SAFE and PEACEFUL public campaign for the next five years everywhere in the country. To a point where everyone knows what happened. Next time around, people would act on it and will make sure they vote for the right person and the party. If this happens again and IK doesn't get help from the courts, etc, then he can call for further sittings and long marches and stuff. Putting people in harms way isn't right and no one can justify it and in this case, many killings have already happened, including Policemen and government officials.
Please don't come back with justifying that Police started anything first. I've seen videos everywhere and on the media. You can see how violent and gangster type of extremist people are destroying public and state property and including kidnapping policemen and at times killing them.
I don't have any affiliation with anyone. It's sad to see Pakistan burning up when there are many other non-violent ways to solve these issues that under any circumstance, aren't above the safety, security, economy and your nation.

You are comparing evolved democracies with functional state organs to a country where you can just buy up an election.
Let me state again. Until and Unless the entire system in Pakistan is revamped we will continue to teeter on the edge of collapse instead of realizing our enormous economic potential. I can also assure you that if the political/bureaucratic system is not revamped the next govt would be that of PPP which will do what it did in the past 5 years, leeching our money to foreign bank accounts and i also suspect a secret deal they have with PMLN for playing musical chairs.

Mr Sharif has multiple loyalties, he has business interests to take care of in UAE, KSA, UK, Turkey and even in India of all places. How can we trust a leader who rigged the entire election and has his personal interests in foreign countries?
How can we expect NS to lead our nation's cause against India where if he takes a hardline, they will push against his personal business and how do we make sure that he doesn't let our national interests down for personal gain?

We are exiting the war, the world around us is being shaped by fast moving geopolitical events which we can use to our advantage but only with a leadership with sole loyalty to Pakistan and its interests. That cannot be achieved till the politico bureaucratic system is revamped completely even if you conduct 20 more elections. Our nation is at a stage where we have to make tough but strategic decisions.

 

[Viper0011.]

You are comparing evolved democracies with functional state organs to a country where you can just buy up an election.

Let me state again. Until and Unless the entire system in Pakistan is revamped we will continue to teeter on the edge of collapse instead of realizing our enormous economic potential. I can also assure you that if the political/bureaucratic system is not revamped the next govt would be that of PPP which will do what it did in the past 5 years, leeching our money to foreign bank accounts and i also suspect a secret deal they have with PMLN for playing musical chairs.

Mr Sharif has multiple loyalties, he has business interests to take care of in UAE, KSA, UK, Turkey and even in India of all places. How can we trust a leader who rigged the entire election and has his personal interests in foreign countries?
How can we expect NS to lead our nation's cause against India where if he takes a hardline, they will push against his personal business and how do we make sure that he doesn't let our national interests down for personal gain?

We are exiting the war, the world around us is being shaped by fast moving geopolitical events which we can use to our advantage but only with a leadership with sole loyalty to Pakistan and its interests. That cannot be achieved till the politico bureaucratic system is revamped completely even if you conduct 20 more elections. Our nation is at a stage where we have to make tough but strategic decisions.

With all due respect (and you know I do respect your posts a lot), your opinion / IK's voice is very selfish for your country at many levels. Allow me to elaborate a little (oh boy when did I wish to argue with the admin to get banned entirely ) but here goes:

1) You are absolutely right. I am comparing highly evolved democracies with the one who's not ALLOWED to take shape. This gov't (if it completes its term) would be the SECOND full time government, which will really shape the face of your system as it exists. All institutions, electoral process and people will experience a process for the second time and every one will learn to follow it. That's the key in democracy. It's a process and it continues on people's wishes peacefully.

2) Paranoia and politics don't go together. You are a smart guy, I can tell. You as a human should question as to why IK's propaganda vs, the reality is soo indifferent? You, the people make the politicians run an agenda. Not the other way around. This democracy thing is for people only. Not for the leaders. Leaders are nothing by themselves.

This whole thing about PPP and Shariff's "deal" is all B.S. I know this by sitting here in the US. PPP got thrown out because they didn't do JACK for the people. From what I can see (and I am SURE if you honestly look around, you'll see it too) that there is NO chance of PPP coming into power the next time. IK has a LOT more chances than PPP, its guaranteed and very obvious if I can see it, you should be able to too.

3) Multiple loyalties.....if I remember correctly, isn't Shariff the SAME guy who made Pakistan the atomic power by taking a decision and by standing in front of the world? He was offered MANY billions worth of aid and personal interests, etc. But he made the call because if he hadn't, history would remember him in a way that his family would be considered traitors. No politician family wants that. It's the people and the future votes that make these guys run and do things for the people. PLEASE also know, by no means I am saying he's not done anything or corruption. All Pakistani politicians including IK have had histories. I can write a book on it and its fact based.

Multiple loyalties also include IK too....a man's MOST CLOSEST asset is his Children and in Pashtuns, their boys as they are the next men in line. IK's children are British ....so on your logic, what's the guarantee that down the road, a few years from now, he won't do anything weird to support his kids political future in the UK? I can BET all my money that those kids will be in the British politics.

4) There is no such thing as "sole loyalty" to Pakistan. If that was the case, IK wouldn't have called out for violent threats, forcefully taking over the Capital of the Country, toppling the government, etc. He should've learned to talk in democratic ways. How is it that he ALWAYS wanted to negotiate with the Taliban who killed thousands of military and civilian Pakistani people BUT here, he can't try to defuse the situation out of Ego and Anger? and he's ready to risk more lives than what's already lost?

Truth is you have to learn to bend and work together. In the West (and you know it), they say that "I don't have to like you as a person, but I do have to work with you", so both of us, work as a team for shared goals (in this case, Pakistan for IK and Shariffs both). Then why not??

The truth is not on the opposite poles, its in the middle somewhere. The faster that these guys get to the middle the faster you can increase a system's capacity to have all the validation rules IK wants, the economic growth that Shariff's have been working towards (referenced in this very thread)......it's a win win situation for all Pakistanis and Pakistan as a country.

It'll ALSO teach people and the history a lesson that Pakistan's system has reached a maturity level where it can go through rough patches like these and can still recover and get stronger. It's time to work together and not work the ego!

 

[Meengla]

@orangzaib,
You are an asset to Pakistan and this forum! Thanks!

 

[Bang Galore]

Pakistan's problem with democracy is that people still haven't gotten used to it. If Imran Khan or anyone else felt they were hard done by, the correct & indeed, the only approach should be to go to the courts. Attempting to destablise the government in this manner risks systemic damage. After all, anyone who can bring a couple of million people to the streets then can hold the country to ransom and there will always be many millions opposed to any government. Nawaz Sharif completing his term would be good for Pakistan, even if it might not be for some of his opponents. There is nothing unique about "established" democracies, a couple more governments completing their term and Pakistan too will be an established democracy. Every government that completes its term & a peaceful transition ensures after, makes the chance of Pakistan slipping into a non-democratic position less & less. That should be worth the sacrifice regardless of what one feels about Nawaz Sharif or anyone who succeeds him in the next government. @orangzaib is correct on this score.

Another thing that Pakistan must institutionalise is the senior-most General becoming CoAS. That will reduce both lobbying & a need by the favoured General to show that he is his own man by standing up to the GoP. One picked on seniority will simply feel less of that need because no one will attribute his elevation to favouritism. That will help democracy in the long term immensely.

 

[Darth Vader]

@Aeronaut Normally I agree with You But This is Not the time , Yes World is being Changed Around Pak But That change is not Good , Check , Afghanistan , middle east All are in Mess Pakistan is in the State of war and What These so called pathetic polities are doing they are just casing more blunder for their profit . NS is no good never supported him but Time Shows the Truth of a person
IK before the election i thought maybe he will bring a change but After loosing election he Showed his true color hes a sour looser he hasnt done anything in Kpk neither for the IPDs only tried to trash talk about Gov , CJ , Army chief
Dont Even Wanna talk about Qadari.
Just Give me Few answers
How this rally will bring change in Pakistan
What Some Terrorist attack on these rallies
What If People Go crazy
How Will bring new leaders , and by which system and who will chose them
Who will be New leaders

Every one in west Already Thinks Pakistan is not safe , Paksitani Nukes are not safe , No Country was trying to invest in pakistan.
Even N.S is not good but this will only destabilize Pakistan , Change can only come by proper channels not by blocking Cities threatening Government

 

[Edevelop]

This is what PTI wants. They know if PML-N solves energy crises and completes billions of dollars worth of development projects they won't win next elections.

 

[AZADPAKISTAN2009]

I think the move was fairly bad on PTI part , there was no need for such demonstrations , very negative thinking

Most energy projects are in KPK , so there is no need for panic , and also KPK has proven positive ground for PTI they should have been more confident in their own policies and way of handling things

This sudden move to go to march on 14th appears very childish and disruptive to the economic momentum nation was enjoying for first part of year

Mr Qadri did not participate in elections , yet he is crying foul when economy is on correct path ? Pretty sad state of affairs , and while his passionate speeches are great but bottom line if he was so interested why did he not stand in elections last year