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Govt to tap WTO to attract foreign investment

By Sajid Chaudhry

ISLAMABAD: The government has decided to extend foreign direct investment opportunities to member countries of the World Trade Organisation some time in May. The opportunities will be in eight major areas of the services sector, under the General Agreement on Trade and Services, a senior official told Daily Times on Tuesday.

Pakistan has delayed such offer by about a year and a half while other WTO member countries have already submitted their offers to the WTO Secretariat.

The official said Pakistan would open up the financial, transport, telecommunication, education, legal, accounting, health and environment service sectors. “The government will extend lucrative offers in these areas to attract foreign investment. The offers will be open to everyone and will not be withdrawn in any case,” he said.

The financial services sector includes banking, leasing, insurance and asset management. Similarly, the other services areas are also vast and have considerable potential for investment. The official said foreign direct investment would help increase employment and the exportability of services.

He said that according to date on the exports of services till 2003, India’s exports in this sector amounted to $25.04 billion and China’s exports increased to $46.38 billion while Pakistan’s exports were worth a meagre $1.49 billion.

“Pakistan is far behind in this particular sector and, keeping in view the potential in the service sector, we have decided to permanently open up these areas,” he said.

The official said the decision to do so was taken in a meeting of the WTO Council at the Planning Commission on Tuesday.

In the meeting, the commerce minister emphasised the need to provide credible initial offers so Pakistan could make realistic requests to fellow WTO members to reciprocate, according to a press release issued on Tuesday. The minister said service delivery needed to be improved and made more efficient so its concomitant spill-over in other sectors of the economy could increase revenue and generate employment.

After the minister’s remarks, the floor was opened to discussion amongst the key stakeholders who were primarily led by representatives of the finance and telecommunications sectors.

Representatives of both these areas emphasised the need for reform, pragmatic offers and the further opening up of these sectors to healthy competition, resulting in low consumer prices. The positive experience in these two sectors since 1997 was highlighted to demonstrate the tangible benefits of sectoral liberalisation.

During the discussion, the commerce minister appreciated the role played by the Ministry of Commerce as a catalyst in ensuring viable stakeholder input. He stressed the need for further consultations so the submission of offers would be an all encompassing endeavour.

Participants in the meeting agreed with the commerce minister that technical and managerial expertise would also be upgraded as a result of opening up these sectors to foreign investment and international service providers, in collaboration with domestic service providers, would improve the efficiency of service delivery in these sectors.

It was also noted that in view of the current development paradigm, there was an added need to develop expertise in WTO related issues, especially for trade-in services and that each ministry and divisions should build in-house expertise to cater to ongoing negotiations so Pakistan could safeguard its interests.

The commerce minister asked the stakeholders to work towards establishing specialised WTO cells in their respective ministries and divisions. He said dedicated units should be established to deal with the service sector so these units could analyse and access the GATS and its impact on their specific areas of interest.

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