M’sian quest for business opportunities in Pakistan
by Habhajan Singh
PETALING JAYA: There is growing interest among the Malaysian business community to look out for opportunities in Pakistan despite the turmoil that is still plaguing the country, especially with a constant stream of bombings and other calamities that strike the Muslim nation.
This is evident from the strong delegation that showed up for the recently-held Expo Pakistan 2013 in Karachi, the nation’s biggest trade fair.
Some 100 Malaysians, both from the private and the public sectors attended the four-day programme which began on Sept 26. This included a strong delegation from the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCIM).
Perhaps the Malaysian delegation was trying to seek out opportunities in the early days of the advent of a new administration in Pakistan. In mid- May, Nawaz Sharif’s Pakistan Muslim League-Nawaz party won the elections, paving the way for him to assume the prime ministership.
“The new government is more pro-business. You can see improvements,” said an official from a Karachi-based business chamber, a statement which you would often hear when talking about doing business in Pakistan today.
Pakistan’s exports to Malaysia in 2012 were US$252.8 million (RM801.38 million) while its imports were worth US$1.86 billion. Major items export from Pakistan were rice, maize, seafood and cotton yarn. Pakistan’s imports from Malaysia were palm oil, automatic data processing machine, rubber, wood and chemicals.
The new government faces a number of serious challenges to national stability, ranging from an energy and economic crisis to a persistent and lethal Taliban insurgency.
Sharif’s government has so far shown enthusiasm for addressing only a subset of the country’s major issues, according to a report released in July from the US-based American Enterprise Institute.
“This is my second trip (to Pakistan). We are more positive now on Pakistan. We are here to source for material and anything we can get for Malaysia,” said ACCIM deputy chairman Andrew Goh Boon Kim, who is also the MD of Taik Sin Timber Industry Sdn Bhd.
Sindh Board of Investment chairman Zubair Motiwala, who made a number of visits to Malaysia previously, highlighted to the Malaysian delegation the opportunities in the power sector, an area that is crucial to Pakistan in its quest to address its energy deficiency.
The Sindh province, among others, is pushing for wind power via the Sindh Renewable Energy Co.
In this sector, Tenaga Nasional Bhd’s (TNB) stalled power plant project in Pakistan is still an issue that invokes caution.
Its subsidiary, Liberty Power Ltd, owns and operates a 235MW gas-fired power plant in Sindh but has been unable to make money because of the disparity between the price of gas it buys from Sui Northern Gas Pipelines Ltd and the price of electricity it sells to Pakistan’s Water and Power Development Authority.
As a result, Liberty’s proposed second power plant in the province has been delayed with costs more than doubled from the original US$225 million.
In August, Pakistan High Commissioner to Malaysia Shahid MG Kiani told The Malaysian Reserve that the new Pakistan administration is putting emphasis on power production, and TNB should use this “window of opportunity” to propose a solution to the power plant project.
Apart from such experiences, Malaysian businessmen are also aware of the acute challenges that they may have to face should they decide to dig their heels in Pakistan.
Security is one of them. It was pretty obvious, with many of the delegates being constantly reminded to stay within the hotel compounds, when they are not visiting the expo site.
“I know they are concerned for our safety, but it’s far from comforting,” one businessman on the trip told The Malaysian Reserve.
“And we are escorted, front and back, by armed police. Wow! That’s quite an experience.”
Power aside, other offerings from Pakistan include infrastructure development, housing and real estate, financial services and textile.
On the flip side, Malaysian companies are eyeing Pakistan’s potential in agriculture to invest in value-added food, manufacturing and agro based industries on a long term basis.
This content is provided by FMT content provider The Malaysian Reserve
Published in ZaraiMedia.com