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Address to Bahrain Businessman

Pak incentives for;

investors look to

East, ME: Benazir

Manama: Prime Minister Benazir Bhutto has said the macro-economic policy adopted by Pakistan government provides incentives for foreign investment specially for Pakistani partners in the Middle East, far East and Central Asia.

She said this while addressing a joint meeting of members of Bankers South of Bahrain and of Bahrain Chamber of Commerce and Industry on Tuesday. She said that it is the policy that looks to the East and especially to our Islamic countries.

She said Bahrain's remarkable economic diversification is a shining example of potential and success of public-private cooperation. Pakistan watches with admiration the initiatives taken by the Bahrain government to transform it into financial service centre of Middle East.

The Prime Minister said that Pakistan's macro-economic stabilization is to give confidence to the foreign investors.

She said Pakistan economy based on a privatization package to create a favourable investment climate and her government has initiated an energy plan which has ended power shutdowns.

Prime Minister said that by bold trade liberalization Pakistan increased the outward orientation of the economy to take advantage of profitable opportunities in the international market place.

Prime Minister Benazir said Pakistan is the only country in this region where foreign investors can own upto 100 percent equity in any manufacturing of his or her choice.

She said according to new economic policy, the investors do not require any sanction of the government for setting up an industry and dividends and profits are freely repatriable by foreign investors.

All restrictions have been lifted on domestic borrowings by foreign owned firms for fixed investment, and no permission from the government or State Bank is required by companies for obtaining foreign loans for which government guarantee is not sought.

She said no prior permission of Central Bank is needed for issue and transfer of share certificates to foreign investors and non-residents and foreign investors can invest in share capitals of companies through Stock Exchange by payment in foreign exchange.

Benazir said Principals, dividends and capital gains against such shares can be freely remitted and all restrictions on payment of royalties and technical fees have been abolished. Import licensing system has been abolished and Tariff rates on imports have been substantially reduced, she added.

She said Karachi's reputation as a financial center is well- earned and well-established. With recent increase in banking activity, Lahore has also emerged as an important centre for banking. The Prime Minister said that a more friendly regularity framework governing the stock market has evoked excellent response from domestic and foreign investors.

She added that helped by privatization and deregulation, the number of listed companies has increased from 497 in 1990 to 776 in 1996. She said the Karachi Stock Exchange index doubled in a year in 1993-94 and is poised to reach new heights again as economic growth prospects brighten. Stock market capitalization now stands at nearly U.S. dollars 10 billion with a turnover of 2.5 billion shares, she said.

The Prime Minister said the Business confidence will also get a boost from karachi's normalization, to which my government has given top priority. In this regard as well, our policies have achieved significant and positive results over the last year.

During last two years over dollars 2.1 billion of foreign investment came into Pakistan. We have retired one billion dollars of foreign debt and Over 20 billion additional dollars of MOU's are under various stages of implementation.

She said this is a critical moment in the history of the Muslim world. The contours of the economic and political realities of the new millennium are unfolding. There is opportunity. There is also danger. To meet the challenges of this new dawn, this new century, this new and different world, we-- the Muslim countries--need a strategy for Islamic reaffirmation and unity, she added.-APP