Daily Times

In order to create a joint business council to promote the level of mutual trade, Pakistan and France signed a memorandum of understanding (MoU) on May 4, which is the first success of Prime Minister Gilani’s visit to France. The MoU was inked between Pakistan Business Council and the Council of the French Enterprises (MEDEF) comprising the entire gamut of the French industry. The meeting of Pakistan’s delegation with MEDEF focused on the problems faced by foreign investors in Pakistan and their possible solutions. Major areas of concern expressed by the French entrepreneurs were taxes imposed by Pakistan’s government on total investment, which were a deterrent for foreign investment; lack of an even playing field with locally produced items; security situation in Pakistan and energy crisis that is affecting business and industry. The Pakistani officials have asked the French to give proposals on taxes and duties, which could be address in the upcoming budget. As far as security and energy situation are concerned, these are not just hindering foreign investment but are a source of decline of local industry as well. Although Pakistan’s officials have tried to satisfy their hosts with bright prospects of Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan-India gas pipeline and tapping of alternative energy, the ground situation in Pakistan does not inspire much confidence. Same is the case with the security situation. Each province has its own unique problems of security, which is deteriorating rather than improving. Incidents of kidnapping of workers of foreign companies have forced many of them to shut down their operations and leave. Let alone foreign companies, even domestic investors are shifting their capital elsewhere. Therefore, the French can hope to invest only in sectors that are considered safe for investment and whose operations are located in relatively safer areas. The case of terrorist killing of 11 French technicians, who were jointly working on building sub-marines with their Pakistani counterparts, in 2002 in Karachi, is still alive in the French media. Arguably, the situation has deteriorated since then instead of improving. It is doubtful that without addressing these grave concerns, Pakistan would be able to attract much of French investment.

However, on a positive note one can say that prime minister’s visit has bridged the communication gap and promoted contacts between businesses, which might translate into future business ventures, despite the above-mentioned hurdles. The situation of Pakistan’s economy warrants that it seeks whatever help is possible. *