Friday, December 12, 2014

So, Why Pakistan?

Majyd Aziz

 “While US companies have been committed to Pakistan for over six decades, the opportunity presented by the country is finally maturing. Pakistan is a young, growing nation with an increasingly large and sophisticated domestic consumer market. So, why Pakistan? Because the time to start is now.” ~ Miles Young, Chairman, US-Pakistan Business Council, US Chamber of Commerce.

The statement emanating out of the prestigious organization manifests in clear terms the motivating message that should warm the hearts of Pakistan’s policymakers as well as trade and industry. It also demonstrates pragmatism and reflects a sense of urgency. Moreover, despite apprehensions, constraints and negativity, the fact is that business prospects are substantial for the American investor. Pakistan welcomes latter-day Daniel Boones. Undoubtedly, the profit potential, the charm of growth, and the geo-strategic location of Pakistan are alluring.
It is pertinent to mention here that there are four prime areas that an American investor could consider placing financial, technological, and entrepreneurial resources as these are vast fields of opportunities. These relate to inland transportation, livestock and dairy farming, agriculture and mining.

Pakistan has developed and continues to build an excellent road network. The planned Pakistan China Economic Corridor and the Motorways are vivid examples of present and future traffic facilitation. At this moment, Pakistan has an estimated shortage of about 100,000 trucks of various sizes. Trucking has been a perennial impediment in the economic progress. The Pakistan Railways is in shambles and there is no inland waterway. Goods arriving at the Karachi Port, Port Qasim, and to some extent, Gwadar Port are handicapped by the lack of fast track movement either for domestic destinations as well as for Afghanistan. The ensuing hurdle is the higher freight outlays that impact cost of transportation.

American trucking companies, such as Ryder, Schneider or Landstar, could set up mega trucking companies. Taking advantage of the facilities offered by US Ex-Im Bank or OPIC, these companies could transfer their used vehicles to Pakistan and ply these on the Ports-to-Afghanistan route or even to Northern stations of Pakistan. The utilization of tracking system, proven efficiency and systems, and the employment of graduates rather than the traditional drivers would make the desired difference. Furthermore, strategically situated self-owned service stations along the routes would ensure transparency, would control expenditure, and would be time-saving.

Livestock and dairy farming is another formidable investment possibility. Whitewater Dairy Supply Co of Wisconsin took the bold step and invested in a modern livestock farm in Punjab. The American dairy industry has a remarkable track record and this is crucial for Pakistan where milk supply is much less than requirements, where the production of cheese and butter is hopelessly insufficient, and where animals are in huge demand, more so during the Eid-ul-Azha period.

Agriculture, especially Corporate Farming, is sorely needed. The productivity of the farms is very low, mainly due to division of landholdings as per traditional inheritance customs, as well as the absentee landlord syndrome, and as well as the reluctance of feudal sector to invest in modern methods, in employing latest farming equipment, and in non-development of seeds and other inputs. A corporate culture is highly missing and the large agriculture corporations in USA can study, plan and implement investment in this sector.

Another area of blatant neglect has been the minerals sector. Obsolete mining methods, untrained workforce, low productivity and production per miner, inability to make the paradigm shift to latest technology, and non-availability of functional access roads from mine mouth to highways are impediments. Moreover, transportation cost is comparatively higher due to location, due to shortages of vehicles, and due to nature of the cargo.

There are other areas such as the service sector, information technology, oil and gas exploration and so many more. The pie is large for investors from all over the world. Yes, the nation’s non-positive image, the political instability, and the risk factors are deterrents that have to be surmounted. But the US investor has taken bold steps in much serious situations. Pakistan is no exception. Francis Bacon, the English philosopher very aptly stated that “In all negotiations of difficulty, a man may not look to sow and reap at once; but must prepare business, and so ripen it by degrees.”

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