2nd Asian Business Forum

INVESTMENT DIVISION & BOARD OF INVESTMENT

March 03, 2008

At The Center of Asian GrowthPakistan becoming Asias trade, energy and transport corridorBooming South AsiaCapital & Energy surplus Middle EastPakistanLand locked energy rich Central Asia 3

Country ProfilePopulation: 160 million (2006 est.)

GDP (Nominal): US $145 billion (FY07)

Foreign Investment: US $8.4 billion (FY07)

GDP per capita: US $925 (FY07)

FX Reserves (February 04, 2008) : US $15.074 billion

Stock Market Index (February 29, 2008) : 15,078

Improving Economic Indicators

Remarkable DemographicsTotal population: 160 millionPopulation under 25 years: 100 million DemographicsSource: Economic Survey 2006-0781%

Declining Poverty, Unemployment, Debt

Poverty has declined from 34.5% in 2000-1 to 23.9% in 2004-5, which means that 13 million people have come out of poverty in this period.

Unemployment has fallen from 8.3 % in 2000-01 to 6.2% in 2005-06.

Public debt as % of GDP has fallen from over 100% of GDP in 1999 to 53.4% in 2007.

Declining Public Debt BurdenPublic debt as % of GDPSource : Economic Survey2006-07

Pakistan: A Leading Reformer

Runner-up reformer in the South Asian Region (after Maldives) according to the Report of the World Bank and IFC entitled Doing Business in South Asia 2008 which compared business regulations in 178 countries around the world.

Doing Business Ranking among 178 Countries

Top ranked countries in the region for Ease of doing Business

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76

101

107

111

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Sheet1

Sheet2

Indicators2000-012001-022002-032003-042004-052005-06July-Feb 2007

Exports (Billion $)9.29.1311.1612.3114.3916.4710.91

Imports (Billion $)10.7210.3412.2215.5920.628.5819.8

Workers Remittances (Billion $)1.092.394.243.8724.174.63.42

Forex Reserves (Billion $)3.226.4310.7212.3312.6113.1413.38

Stock Exchange Index13001520340252797450998911,179

GDP Growth2.60%3.60%5.10%6.40%8.40%6.60%

Sheet3

Maldives60

Pakistan76

Sri Lanka101

Bangladesh107

Nepal111

Bhutan119

India120

Sheet3

53

74

88

89

100

134

138

MBD0012FECB.xls

Chart1

128356.7-10

17662222

199750.4-28

3631161153

1540.31980.7351

133.22837.61649

Privatization Proceeds

Greenfield Investment

Portfolio Investment

Sheet1

FDI Inflows in Pakistan

Million $

Privatization ProceedsFDI excluding Pvt. ProceedsTotal FDI

2001-02128.0356.7484.7

2002-03176.0622.0798.0

2003-04199.0750.4949.4

2004-05363.01,161.01,524.0

2005-061,540.31,980.73,521.0

2006-07133.22,837.62,970.8

Total2,539.57,708.410,247.9

Proceeds from Privatisation Transactions

2001-02Badin II (Revised) BP Pakistan & Occidental PakistanAdhi Pakistan Oil FieldsDhurnal Western AcquisitionRatana

2002-03United Bank Limited Consortium of Bestway & Abu Dhabi Group Total = $ 176 M

2003-04Habib Bank Limited Total = $ 199 M

2004-05Habib Bank Limited $ 103 MPTCL $ 260 M Total = $ 363 M

2005-06KESC $ 255 MHabib Bank Limited $ 99.1 MPTCL

2006-07July - FebPTCL Total = $ 133.2 M

Sheet2

Foreign Investment Inflows in Pakistan

Million $

YearPrivatization ProceedsFDI excluding Pvt. ProceedsTotal FDIPrivate Portfolio InvestmentPublic Portfolio InvestmentTotal Foreign Investment

2001-02128.0356.7484.7(10)474.6

2002-03176.0622.0798.022820.1

2003-04199.0750.4949.4(28)921.7

2004-05363.01,161.01,524.01531,676.6

2005-061,540.31,980.73,521.03513,872.0

2006-07July-Feb133.22,837.62,970.89816684,620.0

Total2,539.57,708.410,247.91,469.1668.012,385.0

Why Invest in Pakistan:Liberal Investment PolicyEqual opportunity for local & foreign investorsAll economic sectors open to foreign investorsForeign equity upto 100% allowedNo Government permissions requiredAttractive tax, tariff and other incentivesRemittance of capital, profits, royalty, technical & franchise fee allowed Network of Export Processing Zones / Industrial EstatesStatutory protection for foreign investmentBilateral Agreements :Investment Protection 47 CountriesAvoidance of Double Taxation52 Countries

Investment Gaining MomentumInvestment as a % Of GDP

FDI by Country and Sector July Dec 2007-08USD in millions

Functions of ID & BOI

MissionPromotion of foreign and domestic private investment

Facilitation of foreign and domestic investors

Investment Protection (e.g. BITs)

Policy advocacy to improve investment environment

Pillars of Investment StrategyEnhancing Image of Pakistan as Investment Destination

Promoting Investment Projects

Strengthening Investment Protection

Structured Public - Private Policy Dialogue

Enhancing Image of Pakistan as an Investment DestinationPro-active image enhancement focusing foreign investors and international business media.Sign MOUs with other Investment Promotion Agencies.Arrange local and foreign Investment Conferences.Appoint Honorary Investment Counselors.

Promoting Investment ProjectsDatabase set up for :Standardized profiles of marketable investment projectsMarketing NetworkTarget investors and domestic joint venture partnersFacilitate investors at all stages of investment cycle utilizing existing offices in all provincial capitals.

Strengthening Investment ProtectionIncrease investors confidence by improving the protection of contractual and property rights.

Strengthen domestic and international arbitration in line with international best practices.

Enforce Pakistans BITs and sign additional investment-related Agreements to provide credible security packages to investors.

Structured Public - Private Policy Dialogue (PPPD)Structured PPPD presently created by ID & BOIForeign Investor Council (FIC) headed by PM formed with international business leaders being members. Advisory Boards for priority sectors formed and meetings held. Frequent interaction with private sector representatives.PPPD linked with:Competitiveness Support Fund initiatives (CSF).Public Private Partnership initiatives (IPDF).Small and Medium Enterprise promotion (SMEDA).Reforms of economic regulations - regulatory impact assessments by ERU.

Special Economic Zones (SEZs)SEZs instrumental in cluster building; also conducive to site development, administrative rationalization and security protection.

BOI is preparing a draft act on SEZs which will set out legal and institutional framework with incentive package.

Investment Opportunities

Oil & GasMiningPowerIT & Telecom18

Priority SectorsInfrastructureTourismSMEsAgricultureInvestment Opportunities19

Investment OpportunitiesPrivatizationHousingChemicalsEngineering20

Five Key Reasons to Invest1. Geo-strategic location Gateway to the energy rich Central Asian States & the Financial liquid Gulf States

2. Trained Workforce Low cost skilled English speaking & flexible workforce Labour force of over 45 million Large pool of engineers, accountants, managers and IT Professionals

3. Economic outlook Average 7.3% GDP growth annually for the last three years

4. Investment PoliciesLiberal policies and profitable opportunities Liberal trade and low tariff regime

5.Financial MarketsKarachi Stock Exchange is one of the best Stock Markets in the region34

Thank you

Gwadar PortNational Trade corridorEnergy Corridor AsiaAccess to Central Asian Republic

Contemporary competitors within the region