MARIAM ALI BAIG: What is the mandate of the Board of Investment (BOI)?

MUHAMMAD AZFAR AHSAN: Firstly, to facilitate business houses and investors, be they Pakistani or foreign. Secondly, to create awareness about, and market, investment opportunities to the global investor community. Thirdly, all investments from China come under BOI, as do the Special Economic Zones (SPZs). BOI works under the umbrella of the Prime Minister’s office – we are not a separate ministry. Essentially, our role is to market Pakistan to the investor community and attract them to Pakistan. Under this government and the leadership of the Prime Minister, BOI has undertaken 103 reforms and we are moving towards a one-window operation system, although it will take another year to complete.   

MAB: Facilitating business operations has been under discussion for a long time. What is different about these reforms?

MAA: A few years ago, Pakistan was ranked 144 on the World Bank’s Ease of Doing Business Index and last year we moved up to 88. The Prime Minister is personally involved and is committed to this matter. Ever since I joined BOI, we treat investors as if they are our customers and the feedback from the corporate sector and the business community is that BOI has a new face. We are trying to create an ecosystem that fosters a better investment climate.

MAB: What prevented the government from putting into place these reforms earlier?

MAA: I can only talk about the last two months, but bear in mind that 103 reforms were not carried out in two months; the process took almost 18 months – you cannot do this sort of thing overnight.

MAB: What sectors is BOI looking at? 

MAA: There are several priority areas. Agriculture is one. Tourism is another; many players are looking to invest. Some have already started; for example, DoubleTree by Hilton are building a five-star hotel in Nathiagali. The ground-breaking took place two months ago and they plan to start operations in the last quarter of 2024. They are interested in building a five-star hotel in Islamabad and another in Lahore. Technology is a big area with different dimensions; AI, fintech, blockchain. IT exports are now worth $2.1 billion – earlier they were less than $1.5 billion – and we expect to double these numbers in the next 18 months. In textiles, we need to develop value-added services. Construction is booming and several private housing schemes are in the pipeline. Mineral and mining have great potential. Pharmaceuticals are a priority. We are collaborating with the Ministry of Health to reform the Drug Regulatory Authority of Pakistan (DRAP). We are engaging with all the major pharmaceutical companies on API (active pharmaceutical ingredients). Post-pandemic, there have been global supply chain issues and we are working on technology transfer – we will be announcing an API policy soon. A few large investors from China are interested and we are engaging with the local pharma companies regarding joint ventures. This year we expect major developments and concrete agreements in this area. This will be huge for Pakistan and benefit consumers directly. The petrochemical industry is booming; 2.5 to three billion dollars worth of investment is expected in the next two months and we will be introducing a petrochemical policy shortly.

MAB: Pharma’s potential has been touted over and over, but nothing has progressed, not least because DRAP is dysfunctional. As for tourism, what is the point of building five-star hotels when basic support services are missing? Gas is a huge issue and badly affects the industry. Unless these fundamentals are permanently solved, what are the chances of any new project being sustainable?

MAA: We are addressing DRAP. In terms of tourism, I agree that without the infrastructure – starting with good roads and basic facilities and services – we will not get the full potential the sector offers. We need to work on a long-term basis. For example, the coastal highway from Karachi to Gwadar has some of the best beaches in the world. We need to develop a city on this belt, which – given the proximity to the Middle East – can become a regional hub. It will take 20 to 25 years to get there, but as a nation, why are we focusing only on a daily laundry list? Why are we not planning for the next generation? Now is the time for any government in Pakistan to look at the next 30 to 50 years. I see billions of dollars worth of potential investment in every industry, but we need to put our house in order and address the underlying issues. 

MAB: Isn’t the problem the fact that most of the issues are not within BOI’s control but depend on what other ministries do or don’t do? The start-up sector has been successful largely because it grew organically, away from government oversight and regulation. Aren’t you facing a Sisyphean task? You talk about sustained long-term investment, but which government in Pakistan is ever going to do that?

MAA: My submission is that if there is a will, there is a way, and there is the will of BOI and the Prime Minister. I agree it is a very challenging task. You mentioned start-ups. In 2021, over $375 million came through different ventures and this momentum will continue and multiply.

MAB: Does BOI engage with the SME sector?

MAA: Big investments are important and mandatory for Pakistan’s development. However, the base of any sustainable economic development is SMEs, provided we develop a good enabling environment for them. Until now, although the various chambers of commerce and industry were affiliated with BOI, there was no real dialogue, and I am changing this. We have started a project with the Lahore Chamber of Commerce, whereby there will be a complete collaboration between them and BOI so that their pain points can be addressed daily. We are discussing the same thing with the Karachi Chamber of Commerce. They represent the industry and they – not the government – know the issues and where the investment opportunities are. We are collaborating in the same way with the other chambers of commerce. Our role is to propagate awareness about the issues faced by SMEs. Earlier, BOI worked in silos, now we are aggressively present in the market. We are in communication with the industry and are sharing their views with the Prime Minister and the relevant ministries daily. We are vocal, we are aggressive and we are realistic about the line of action that needs to be taken. 

MAB: What is the one thing you most want to achieve at BOI?

MAA: A good governance culture; an effective board of directors with an effective team – one that believes in implementation, not talking. There is no marketing strategy for Pakistan and we need to put one together – short-, medium- and long-term – and learn from other countries. The Pakistan Pavilion at Dubai Expo 2020 is among the third or fourth most visited and 90% of the funding came from the private sector. This is a classic example of a public-private partnership. My question is, why isn’t Pakistan participating in the World Economic Forum and other similar forums? We should be lobbying for Pakistan everywhere. In my opinion, we should be focusing only on the economy and education. We need to understand that there is no external threat to Pakistan; the threat is internal – and the biggest one is the 25 million kids who are out of school. If we fix our house, in 15 years Pakistan will be a very different place. This is why I believe all political stakeholders should collaborate on the big challenges – they can disagree on other things. The world is fast-changing and there is a huge post-pandemic opportunity for Pakistan as investors seek new avenues. But we need to take bold steps to transform ourselves now. And only we can do this.

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