950828

Hyundai, Daewoo willing

to make investment:

seek halt to frequent

policy changes

RECORDER REPORT

KARACHI: Korean giants, Hyundai and Daewoo Corporations have expressed willingness to invest in Pakistan provided economic policies remained consistent.

Talking to newsmen during tea break at the 6th joint meeting of Korea-Pakistan/Pakistan-Korea Economic Cooperation Committees at Hotel Pearl Continental here on Monday morning, Park Se Yong, Chairman of Korean chapter of the committee and president of Hyundai Corporation, said that great potential existed to make investment in Pakistan provided the country pursued consistent economic policies covering longer duration.

He and Lee Kyung-Hoon, chairman, Daewoo Corporation, referred to several MoUs signed by their organizations in the field of power generation, car assembly plants and oil refinery with KESC and private sector organizations and said that they were now waiting for the licences to be able to take up the actual work on the ground.

Daewoo is even prepared to enter into new areas on joint venture basis. Lee Kyung-Hoon said that the government has given them permission for six lane Lahore-Islamabad motor way which they would like to complete as early as possible.

The motor way project which had run into difficulties after the fall of Nawaz Sharif government is no more an irritant in Daewoo-government relations and the Chairman of Daewoo Corporation did not want to look backwards and discuss the issue all over again. "Let us forget about the past," he told newsmen when reminded about the reduction of motorway to four lanes.

During the question-answer session, Park Se-Yong agreed that law and order situation, inconsistency in government's economic policies, frequent changes of governments and the incentives for investment, were the main factors which were taken into consideration by foreign investors before making any decisions.

He suggested that incentives offered by Pakistan should be compared with such incentives offered by other countries because capital will move where the returns are attractive and safe.

Earlier, S.M. Muneer, President, Federation of Pakistan Chambers of Commerce and Industry, in his address of welcome at the 6th joint meeting of Korea-Pakistan/Pakistan-Korea Economic Cooperation Committees, eulogized the economic development and industrial progress since the launching of the first five-year economic development plant in 1962 in Korea. Its economic progress could be judged from the fact that Korea was the 13th leading exporter in the world in 1994 with exports of 96.3 billion dollars and 12th leading importer with imports of 102.3 billion dollars.

This remarkable achievement has come about through long-term and consistent economic policies. Pakistan, surely, has to learn a lot from Korean experience, he said.

Muneer said, it is a matter of satisfaction that although a late starter, the Korean companies are making substantial overseas investment, from which Pakistan is also a beneficiary. By the end of June, 1994 the Korean companies had made overseas investment of US$ 6.4 billion against $ 1.0 billion in 1987. Eight Korea-Pakistan industrial joint ventures have already been established and some more are underway.

The Korean companies are collaborating in various fields such as telecommunication, electronics, chemicals industry, automobile and infrastructure projects like motorway, power generation and irrigation. The government of Prime Minister Benazir Bhutto is making serious efforts to attract foreign investors. The prime minister is herself making hectic visits to foreign countries to invite investors and businessmen to invest in Pakistan.

Muneer sincerely hoped that Korean companies will come in a big way to invest in Pakistan which offers liberal and lucrative incentives to foreign private investors.

You will be pleased to know that the government has decided to set up 12 "special industrial zones" in various parts of the country and has offered special package of incentives for the investors in these zones, Muneer added. Three of these special zones will be set up in Sindh (Port Qasim, Larkana and Nawabshah), three in Punjab (D.G. Khan, Rahimyar Khan and Leah) two in NWFP (between D.I. Khan and Bannu and between Khairab and Akora Khattak), two in Balochistan (Quetta and Windher), one in Azad Jammu & Kashmir and one in Northern Areas. The package of incentives include concessions in customs duty and sales tax on import of plant and machinery and raw materials and concessions in sales tax and excise duty on production. Besides, a policy framework has been devised by the Board of Investment to open up tourism, hoteling and housing sectors for foreign investment.

Muneer expressed happiness that Korea will be providing a loan of US$10 million to the National Development Leasing Corporation to cater to the requirements of machinery of the small scale entrepreneurs.

"A new area of Pakistan-Korea collaboration is the supply of manpower to the small and medium enterprises in Korea which are faced with serious shortage of manpower. This will be helpful to both countries. While Korean enterprises will overcome their manpower problem, the Pakistani workers will get training which will be useful to Pakistan on their return," he said.

A Rehman Jinnah, Chairman, Pakistan chapter of the committee in his address of welcome said hat the private sector Pakistan sincerely looks forward to the establishment of close business contacts with its counterparts in South Korea. As a result of the encouraging economic policies of deregulation and privatization ensued by the present government, Pakistan has become a land of exciting opportunities for foreign investors.

Now foreigners can own 100 percent of equity of a company and are allowed free repatriation of capital and return on investment. They can obtain foreign currency loans directly without the Government's approval and there are no restrictions on payment of royalties and technical fees to foreign collaborators.

He said that the Koreans have demonstrated a phenomenal economic development during the last 20 years which will serve as a model for other developing countries. Pakistan will also like to benefit from this experience to fill the gap in its development process through technical cooperation and transfer of technology. We are happy that during the visit of Pakistan delegation to Korea led by Asif Ali Zardari, MNA, last October, MoUs for investment of over $4 billion were signed. We keenly look forward to early progress in their implementation, he added.

Chairman of the Korean chapter of the committee Park Se-Yong in his opening remarks expressed pleasure to address such distinguished audience and business leaders from Pakistan and Korea at this joint meeting on behalf of the Korean delegation. He expressed his sincere appreciation to Chairman Jinnah of Pakistan Chapter Committee and FPCCI President Muneer and his colleagues for their warm welcome and hospitality given to him and his delegation.

"I believe that this 6th joint meeting is a very significant occassion for our committees, in that it is being held after a seven-year's break. During the intervening period, the trade relationship between our two countries has improved and the atmosphere of mutual cooperation in trade and industrial sectors have further expanded", he said.

Park Se-Yong pointed out that the two-way trade volume between our two countries has increased from $379 million in 1988 to $602 million in 1994. This outstanding result of trade performance is largely attributable to the effort of mutual cooperation by both our countries in the midst of increasing international competition.

In the field of investment and joint ventures, he believed the two countries have many areas where they can cooperate by combining Pakistan's abundant natural resources and labour force with Korea's experience in achieving economic development.

He, however, said that business cooperation between our two nations has not been so satisfactory as to meet the desire of the business circles of the two countries in light of both nation's economic potentials and capabilities. There remains a considerably large room for expansion of bilateral economic cooperation untapped as yet.

Park Se-Yong said: We are here today to discuss about the best possible areas of cooperation between our two business communities. Those will include bilateral trade and investment. I firmly believe that the 6th joint meeting will be a good forum for exchanging constructive and realistic ideas, and I sincerely hope that we will be able to discover all the business possibilities at this meeting and our deliberations will lead to tangible results in the near future".