TOKYO: Pakistan has been ranked second in the world in terms of business growth in a survey conducted by the Japan External Trade Organization (JETRO), the News has learnt.
The current survey – which examined records of 9,371 Japanese firms operating across the world – put Pakistan just behind Taiwan in terms of business generated; leaving behind both India and Japan. JETRO has been conducting such surveys since 2013
Pakistan’s data was generated from 27 Japanese firms doing business here. The results found that 74.1% of the Japanese companies estimated operating profit in 2013, allotting second rank to Pakistan only after Taiwan (81.8%). Compared to this, 60.7% Japanese firms in China and 45.8% in India made operating profit in 2013.
If the survey is any guide, not only have a majority of the already-present Japanese investors in Pakistan posed confidence in terms of guaranteeing business opportunities, they have also declared their intentions to expand their business here. But new companies are reluctant to invest in Pakistan and security is being cited the prime concern.
Shun Imaizumi, president of Japan-Pakistan Association and recipient of Pakistani award (Sitara-i-Imtiaz) granted in recognition of his services, also echoed the same line saying security, electricity and road infra-structure needs urgent attention of the government for wooing foreign investment. Asked what needs to be improved first, he said: "security."
Meanwhile, Japanese government is also concentrating on these areas as far as its sanctions of loans for different projects are concerned.
Documents available with The News indicate that a loan of $38 million on road infrastructure in last four years. Kohat Tunnel and Indus Highway are two noteworthy projects being carried out with Japanese loan. Likewise, second biggest loan of $ 34 million has been given in four years by Japan for coping with the power crisis.
A mega $2 billion project of Karachi Circular Railway is also on the horizon soon and will be a big boost in Japanese interests in Pakistan.
"Media's voice is louder than the findings of our survey," said Naoyuki Maekawa, senior coordinator for South Asia in JETRO.
JETRO has been urging Japanese investors to benefit from the conducive business environment in Pakistan, Mr. Maekawa told The News. He added, “But they stop giving us ears when they start reading news stories of bomb blasts.”
A single Japanese was killed during 2008's terrorism incident in Mumbai and nobody went to India from Japan in next three months, he said explaining that insecurity discourages investment.
There are more than 20,000 Japanese companies in China and over 1000 in India. There is an increase of 100 Japanese companies in India every year, said JETRO official. Apparently, China is a hot destination for investors but many want to pull out due to various laws.
"It is easy to invest in China and difficult to pull out," said Yoshiji Nogami, former foreign minister of Japan and currently President of Japan Institute of International Affairs.
While Pakistani laws are more favorable for foreign investors as compared with China and India both, nevertheless the terrorism-hit country has so far been able to convince only 70 Japanese companies for investment, majority of them in manufacturing sector, automobile industry in particular.
Other than security reasons, official apathy is also to be blamed. From 1990 to 2014, three Pakistani Prime Ministers visited Japan and vice versa. Contrast this with Japanese PM's recent visit to India where he was chief guest of honor on India's Republic Day parade. This is second visit of Japanese PM to India in three years.
Not only they noted growth in their existing business, 70.4% Japanese investors in Pakistan forecast further improvement in their business during 2014.
Business confidence exceeds 40 points in Cambodia, Myanmar and Pakistan, JETRO's survey found explaining the feedback collected from Japanese investors already doing business in the respective countries. This confidence has diminished in major countries like India and Indonesia, notes the survey report. Compared to 70.4% investors posed confidence on Pakistan, only 56.6% Japanese in India and 40% in China have expressed business confidence on the respective governments. In terms of business expansion, 81.5% Japanese investors in Pakistan declared such intentions while responding to survey questions, compared to 78.3% in India and 54.2% in China. This correspondent held meetings with different officials dealing with Japanese investment in Pakistan. They range from the executives of Japan Chamber of Commerce and Industries to JETRO, JICA and economists specializing on Pakistan. Majority of them agree that while Pakistan promises great business opportunities for Japanese investors, but security remains the foremost concern.
Source: The NEWS