Business | Opinion
Political stability is key to attracting investors
Pakistan's new push to attract fresh foreign investment to its oil and gas exploration, production and supply sectors, comes across as nothing short of another half-baked measure.
- By Farhan Bokhari, Special to Gulf News
- Published: 23:25 January 25, 2009
Pakistan's new push to attract fresh foreign investment to its oil and gas exploration, production and supply sectors, comes across as nothing short of another half-baked measure.
This is not to forget that such areas are essential for the Pakistani economy.
But the way this objective is being pursued ignores some of the key challenges faced by Pakistan at a difficult time.
In the past few days, the latest such pitch for seeking foreign investment came from Dr Asim Hussain, Pakistan's minister for oil and gas, during a meeting with a foreign ambassador to Islamabad.
Reportedly, the minister during this meeting, informed the ambassador about the incentives offered by the Pakistani government, which were attractive enough to give an impetus to foreign investment activity.
The minister has probably forgotten some hard realities about the present state and future outlook offered by Pakistan in areas of relevance to investors.
The most vital and pressing matter to make life difficult for investors is indeed the very fact that Pakistan's government, a year after it took charge of the country following parliamentary elections early last year, has failed to end what appears to be recurring political uncertainty.
In recent weeks, Pakistani newspapers have carried many accounts of an ongoing tussle between president Asif Ali Zardari and prime minister Yousuf Raza Gilani.
The two men who are supposed to oversee a new and more stable chapter in Pakistani politics, are instead overseeing an early period of instability.
To make matters worse, Pakistan's internal conditions are far from secure for the benefit of foreign investors. A state where the government itself remains structurally in disarray is hardly a place where investors will feel compelled to come.
The prevailing insecurity in parts of the country, especially areas potentially rich in oil and gas such as the south western province of Balochistan and the southern province of Sindh, is hardly a helpful reality.
The response to such powerful challenges has to be at least three-fold.
First, the government itself must overcome the reported rift between the top rulers if it wants to present an image of stability and continuity.
In sharp contrast, such a rift will only reinforce the view that Pakistan's present day ruling political structure will have a short tenure - an impression that is bound to turn away prospective investors who will simply want to know who they are going to be left dealing with in the medium term before they step forward.
Second, there must be adequate steps put in place to deal with real life issues such as insecurity for oil and gas explorers in parts of Pakistan.
A special force using some of the best trained soldiers has to lead the effort in providing a radical improvement in the way security is provided to foreign companies which overlook the impediments specific to Pakistan, and still step in the fray.
Finally, there must be a concerted effort towards filling the gap between pronouncements such as the ones put across by the oil and gas minister, and what is available to prospective investors in real life.
Sadly and tragically, Pakistan has a long history of making commitments but failing to iron out the real life difficulties for prospective investors.
In the past, there have been many instances where bold announcements have not been accompanied by bold effort to improve the situation on the ground.
It would be much worse for Pakistan to have prospective investors look at the country and turn away because of their failure to see the situation on the ground matching the promises from top leaders.
In the interest of securing badly needed investment in an area as critical as oil and gas, Pakistan cannot afford to go wrong any longer.
- The writer is a journalist based in Pakistan.
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