Razak Dawood stresses economic integration with Afghanistan, CARs

ISLAMABAD: Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood on Wednesday underlined the need to enhance economic and trade integration with Afghanistan and Central Asian Republics (CARs) in order to boost regional connectivity.

He said this during a meeting with US International Development Finance Corporation (IDFC) Chief Executive Officer Adam Boehler at the Ministry of Commerce, said a statement issued by the Ministry of Commerce.

Board of Investment (BOI) Chairman Atif Riaz Bokhari and Commerce Secretary Yousaf Naseem Khokhar were also present on the occasion. 

While giving an overview of Pakistan’s economic relationships with regional countries, the adviser said that Pakistan was already working closely with Afghanistan, particularly on the development of transit trade, with an aim to build long-term economic relationships.

“Pakistan is also looking for stronger connectivity with Central Asian Republics, which will include the building of not only roads but also the power infrastructure,” he added. 

The adviser emphasised that Pakistan was a high-cost energy country and with the stronger connectivity with CARs, the country could lower these costs for investors and businesses. 

He urged the IDFC to play a facilitative role as an interlink between these regional countries so that mutual objectives could be achieved. 

Discussing various investment opportunities in Pakistan, Dawood apprised the IDFC CEO of the public-private partnership mode introduced by the government to relieve some burden of the annual PSDP expenditure.

He continued that Pakistan was in need of foreign direct investment as it would bring along technology, improvement in productivity and employment opportunities for the locals. 

“Pakistan is looking for diversification in FDI as investors from all over the world, irrespective of their country of origin, are provided with a level playing field and equal support from the government,” he claimed.

The adviser also shared the problems being faced by the businessmen in Pakistan amid Covid-19 pandemic, including liquidity issues and cancellation of export orders. 

Speaking on specific areas where IDFC can support Pakistan, BOI Chairman Atif Riaz Bokhari talked about the mortgage lending sector, where a joint venture with Pakistani businesses could be established to provide affordable housing solutions to the public.

Bokhari also talked about development of a Science and Technology Industrial Park in Pakistan as well as investing in small and medium-scale hydropower projects.

Talking about the mode of investment, the BOI chairman stressed the importance of equity investment rather than direct loans, which was a more sustainable approach towards development. 

The IDFC CEO informed the adviser that they intend to start a regional fund for development in CARs that have shown an interest in Pakistan’s involvement in the fund. 

He informed that IDFC has a $3 billion fund for immediate liquidity requirements of financial institutions in the aftermath of Covid-19.

He also discussed a number of opportunities with the Pakistani side and decided to pursue different options as discussed in the meeting.