At the center of Asian growthPakistan becoming Asia’s trade, energy and transport corridor

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UAlmaty

FrunzeKazakhstan

Pakistan becoming Asia s trade, energy and transport corridor

# #

#

#

Kashi

Dus hanfe

Toshkent

Samarkand

Ashkhabad

Uzbekistan

Turkmenistan

Kyrgyzstan

TajikistanLand locked energy rich

Booming & energy#

#

##KabulHerat

Mashhad

Islamabad

China

Jum mu & Kas hmir

energy rich Central Asia

energy deficit China

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####

#

#

Yaz dLahore

Zahedan

AmritsarQandahar

Rawalpindi

Faisalabad

Iran Pakistan

AfghanistanKas hmir

(Disputed Territory)

##

#

# ##

## #

#

Delhi

Patna

JaipurKanpur

Luc know

Benares

New Delhi

Kathmandu

HyderabadIndia

Nepal

Booming SouthCapital &

Energy surplus

2

# #

#

#

#

#

N

MasqatKarachi

Ca

Abu Zaby

Ahmadabad

Omanab Emirates

Booming South Asia

Energy surplus Middle East

Liberal investment policy▪ Equal treatment of local & foreign investorsEqual treatment of local & foreign investors

▪ All economic sectors open to foreign investors

▪ Foreign equity up to 100% allowedg q y p

▪ No Government permissions required

▪ Attractive incentives package

▪ Remittance of capital, profits, royalty, technical & franchise fee allowed

▪ Import of raw material for export manufacturing zero-rated

▪ Bilateral Agreements

– Investment Protection: 47 Countries

– Avoidance of Double Taxation: 52 Countries

▪ Protection of foreign investors through the;

F i P i t I t t (P ti & P t ti ) A t 1976– Foreign Private Investment (Promotion & Protection) Act 1976

– Protection of Economic Reforms Act 1992

Doing business in South Asia 2010

Ease of doing businessRanking

137133129120119

1061021028785

1

Singapore Pakistan China Sri Lanka Egypt Bangladesh Russia Brazil India Iran

Home to over 700 companies

Haier

Deutsche Bank

Reform Process

Government strongly committed to restoring macroeconomic stability as well as the confidence of markets and investors

Comprehensive & integrated medium term strategy evolved – “9-point”program to increase productivity, efficiency & high growth rates1) Macroeconomic Stabilization)2) Social Development, including Social Protection3) Agriculture Productivity Enhancement, Agribusiness and Agro

Process Promotion and CompetitivenessProcess Promotion and Competitiveness4) Industrial Competitiveness5) Human Capital Development6) Energy7) Capital Markets8) Public Private Partnerships for Infrastructure8) Public-Private Partnerships for Infrastructure9) Institutional/Governance Reform

Pakistan’s Economic Overview

2.1 % GDP growth (2008-09).

FDI Inflows during 2008-09 ($ 3.7 billion)

Exports during 2008-09 ($ 17.79 billion)g ( )

Imports during 2008–09 ($ 34.82 billion)

Forex Reserves ( July 2009) $ 12.23 billion

Worker’s Remittances during 2008-09 ($ 7.81 billion) g ($ )

4.7 % growth in Agriculture Sector (2008-09)

Cont’d….

Pakistan’s Economic Overview

(-10.8) % growth in Construction Sector (2008-09)

3 6% th i S i S t (2008 09)3.6% growth in Service Sector (2008-09)

(-3.3) % growth in Manufacturing Sector (2008-09).

(-7.7) % growth in Large Scale Manufacturing Sector (2008-09).

7.5 % growth in Small Scale Manufacturing Sector(2008-09)

1.3 % growth in Mining & Quarrying Sector (2008-09).

Total investment 19.7 % of GDP for 2008-09 against 22 5 % f GDP f 2007 0822.5 % of GDP for 2007-08

Special Economic Zones (SEZs)Special Economic Zones (SEZs)

▪ SEZ Act is being framed to create cluster of manufacturinginvestors with effective and efficient infrastructure to competeinvestors with effective and efficient infrastructure to competeglobally

• Tax Holidays• Tax Holidays– 10 years for Zone developers– 5 years for investors in the Zone

▪ Duty free imports of plant and machinery

O i d f ilit ff d b BOI▪ One window facility offered by BOI

Year wise FDI Trendswith Privatization Proceedswith Privatization Proceeds

266

133

5000

6000

541015403000

4000

Mill

ion

$

1981

4873

3722

176199

3631000

2000

357622 750

1161128

176

02001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

Greenfield Investment Privatisation

10

Greenfield Investment Privatisation

Country Wise FDI in PakistanCountry Wise FDI in PakistanUS$ Millions

US$ MillionsCountry 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

USA 211.5 238.4 325.9 516.7 913.1 1,309.3 875.3

UK 219.4 64.6 181.5 244 860.1 460.2 263.4

U.A.E 119.7 134.6 367.5 1,424.5 661.5 588.6 178.2

Japan 14.1 15.1 45.2 57 64.4 131.2 74.3

Hong Kong 5.6 6.3 32.3 24 32.6 339.8 156.1

Switzerland 3.1 205.3 137.5 170.6 174.7 169.3 227.3

Germany 3.7 7 13.1 28.6 78.9 69.6 76.9

Norway 0.3 146.6 31.4 252.6 25.1 275.0 101.2

11

Others 220.4 130.1 388.1 801.4 2,327.7 1,808.6 1,769.1

Total 798.0 949.0 1,523.9 3,521.0 5,139.6 5,152.8 3,721.8

Country-wise FDI in Pakistan (Jul 09- Mar 10)

Country Million $ % age

USA 443.9 28.6

Netherlands 268.4 17.3 443.9, 29%

284.6, 18%

USAU.K 168.0 10.8

U.A.E 136.8 8.8

Switzerland 103 8 6 778.5, 5%

69.9, 4%

USA

Netherlands

U.K

U.A.E

SwitzerlandSwitzerland 103.8 6.7

Singapore 78.5 5.1

Cayman Island 69 9 4 5 268.4, 17%136 8 9%

103.8, 7%Singapore

Cayman Island

Others

Cayman Island 69.9 4.5

Others 284.6 18.3

Total 1 553 9 100 0

168.0, 11%

136.8, 9%

12

Total 1,553.9 100.0

US$ MillionsSector Wise FDI in PakistanSector Wise FDI in Pakistan

Sector 2002-03

2003-04 2004-05 2005-06 2006-07 2007-

08 2008-09

Oil & Gas 186 8 202 4 193 8 312 7 545 1 634 8 775 1Oil & Gas 186.8 202.4 193.8 312.7 545.1 634.8 775.1

Financial Business 207.4 242.1 269.4 329.2 930.3 1,607.6 707.4

Textiles 26.1 35.4 39.3 47.0 59.4 30.1 36.6

Trade 39.1 35.6 52.1 118.0 172.1 175.5 165.7

Construction 17 6 32 0 42 7 89 5 157 1 88 5 92 5Construction 17.6 32.0 42.7 89.5 157.1 88.5 92.5

Power 32.8 14.2 73.4 320.6 193.4 70.3 119.8

Chemical 86.1 15.3 51.0 62.9 46.1 78.0 74.3

Transport 87.4 8.8 10.6 18.4 30.2 73.0 93.1

Communications(IT & Telecom) 24.3 221.9 517.6 1,937.7 1,898.7 1,625.3 879.1

13

(IT & Telecom)

Others 90.4 170.1 274.0 285.0 1,107.2 769.7 778.2

Total 798.0 949.4 1,523.9 3,521.0 5,139.6 5,152.8 3,721.8

Sector-wise FDI in Pakistan (Jul 09- Mar 10)

Sector Million $ % age

Oil & Gas Exploration 519.9 33.5

Telecommunication 264.1 17.0

326.4, 21%

cation

Financial Business 118.7 7.6

519.9, 33%

76.5, 5%

Oil & Gas Exploration

Telecommunication

Financial Business

Transport

Transport 90.1 5.8

Paper & Pulp 80.5 5.2

Construction 77 7 5 080.5, 5%

77.7, 5%Paper & Pulp

Construction

Chemicals

Others

Construction 77.7 5.0

Chemicals 76.5 4.9

Others 326.4 21.0

264.1, 17%118.7, 8%

90.1, 6%

14

Total 1553.9 100.0

Total FDI Vs FDI in IT & Telecom Sector

6,000.0

4,000.0

5,000.0

US $ Milli

3,000.0Communication(IT&Telecom)Total

Millions

2,000.0

00

1,000.0

Years

15

0.02000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Jul-Feb 10

Investment O t itiOpportunities

inin Pakistan

16

Investment opportunities

▪ Offshore & Onshore Exploration

▪ Refining

Oil & Gas

▪ Refining▪ Pipelines▪ Storages

▪ Hydel▪ Coal

Priority SectorsPriority SectorsM

inin

g Power

Hydel▪ Thermal▪ Coal▪ Solar▪ Wind▪ Biogas

Coal▪ Granite▪ Marble▪ Copper▪ Semi-

Precious

IT & Telecom▪ BiogasPrecious

Stones

▪ Call centers▪ Cell phone▪ E-Commerce▪ Software▪ IT Parks

17Cont’d….

Investment opportunities

▪ Ports & Roads▪ Urban Mass Transport▪ Water supply &▪ Sanitation▪ Housing▪ Desalination

▪ Textiles ▪ Leather▪ Hotels Infrastructure▪ Electronics▪ Furniture▪ Gemstones▪ Food

ProcessingS t &

Hotels▪ Resorts▪ Theme

Parks▪ Cultural

tourism

Priority SectorsPriority SectorsTo

uris

m SMEs

▪ Sports & Surgical goods

▪ Value added textiles

▪ Entertain-ment Centers

▪ Agri-Business ▪ Livestock & Dairy

T

Agriculture

Livestock & Dairy▪ Corporate Farming ▪ Fisheries▪ Fruits & Vegetables▪ Seed Production▪ Storages

18Cont’d….

Investment opportunities

▪ Oil & Gas▪ Infrastructure▪ Power▪ Industry/ Real Estate

Privatization

y▪ Banking

G lf Cit

▪ Pesticides▪ Dyes▪ Agro Based

Priority SectorsPriority SectorsH

ousi

ngChem

ica

▪ Golf City▪ Water City▪ Sports City▪ Media City▪ Residential

Complexes

Agro Based▪ Mineral

Based▪ Synthetic

Fiber▪ Pharma-

ceuticalsHals

Engineering

▪ Light & Heavy EngineeringA t bil

▪ Office apartments

ceuticals▪ Petrochemical▪ Complex/

Naphtha▪ Cracker

▪ Automobiles▪ Auto parts▪ Agriculture Machinery▪ Steel Production▪ Textile Machinery

19

IT & TelecomIT & Telecom Sector

Emerging IT & Telecom Boom

97 Million cellular users & growing97 Million cellular users & growing

More than 19 million internet users

Above 688,373 Broadband subscribers,

Total direct and indirect jobs in Telecom

sector are 1.36 million

Pakistan emerging regional traffic hub for Middle East Afghanistan & Central AsianMiddle East, Afghanistan & Central Asian Republics

21

I.T & Telecom - Incentives

100% foreign equity allowed insoftware houses

Minimum US $ 0.15 millioninvestment is required in servicesector

Piracy laws to protect softwarey

Tax holiday on software exports till2018

0-5% Custom Duty on imports of PME

22

Initial Depreciation allowance is 50%of PME Cost

I.T & Telecom Development

Software Technology Parks China

Medical & Legal transcriptions

IT Law (digital signatures, Afghanistan

( g ge-commerce, Secure comm.)

Task forces & synergies y g(Health, Agri, Call Centers, Women in IT, IT & PovertyAlleviation, Venture Capital etc.)Alleviation, Venture Capital etc.)

Education (Virtual University, IT Universities IT faculty training IT

IranIndia

23

Universities, IT faculty training, IT curriculum for class IX- onwards)

1707 cities on the internet300 cities on Fibre

Major Telecom Companies in Pakistan

24

List of Mobile Operators

S/N Organization Licensed Region

Brand Name PAKISTAN AJK/NA

1M/s Pakcom Limited Yes No License Instaphone M/s Pakistan Mobile Company

2Mobile Company Limited Yes Yes Mobilink

3 M/s CMPak Limited Yes Yes Paktel M/s Telenor

4 Pakistan Limited Yes Yes Telenor

5M/s Warid Telecom Limited Yes Yes Warid

6

M/s Pakistan Telecom Mobile Limited Yes Yes Ufone M/s Special

25

7

M/s Special Communication Organization No License Yes SCO

List of WLL Service Operators

1 Pakistan Telecommunication Company Limited 2 Telecard Limited. 3 Wi-Tribe Pakistan (Formerly Burraq Telecom Limited)4 DV Com Data (Pvt.) Limited 5 WorldCall Telecom Ltd5 WorldCall Telecom Ltd. 6 Wateen Telecom (Pvt.) Limited 7 Great Bear Int'l (Pvt.) Limited 8 Cyber Internet Services (Pvt.) Ltd 9 Link Direct International (Pvt.) Ltd.

S ( )10 Super Dialogue (Pvt.) Ltd. 11 MyTel (Pvt.) Ltd. 12 Metrotel (Pvt.) Ltd.

26

12 Metrotel (Pvt.) Ltd. 13 Defence Housing Authority

List of LDI OperatorsS # Company Name License StatusS # Company Name License Status 1 Redtone Telecommunications Pak. (Pvt.)

Ltd.Operational

2 Link Direct International (Pvt ) Ltd Operational2 Link Direct International (Pvt.) Ltd. Operational 3 Callmate Telips Telecom (Pvt.) Ltd. Terminated (wef. 28-10-

2008)4 Tele Card Ltd Operational4 Tele Card Ltd. Operational 5 DV Com Ltd. Operational 6 Wise Communication Systems (Pvt.) Ltd. Operational 7 Dancom Pak. (Pvt.) Ltd. Operational 8 Wi-Tribe Pak. Ltd. Operational 9 Wateen Telecom (Pvt.) Ltd. Operational ( ) p

10 Telenor LDI Communications (Pvt.) Ltd. Operational 11 Circle Net Communications (Pvt.) Ltd. Suspended (21-12-2009)12 Multinet Pak (Pvt ) Ltd Operational

27

12 Multinet Pak. (Pvt.) Ltd. Operational 13 4GB Gentel International (Pvt.) Ltd. Operational 14 World Call Telecom Ltd. Operational

Telecom Sector Overview

In budget 2008-09 thetelecom industry taxrates reduced i e GSTrates reduced i.e. GSTfrom 21% to 19.5%and 50% reduction inactivation tax i.e.import duty on mobileimport duty on mobilesets from Rs. 750 toRs. 250.

▪ Telecom sectorrevenue grew by 20percent and generatedRs 327 8 billion asRs 327.8 billion asrevenue

▪ Telecom sector paidR 112 billi t

28

Rs 112 billion as tax

Cont’d….

Telecom Sector Overview▪ Tele density (percentage▪ Tele-density (percentage

of mobile users) ofPakistan stood at 63.5percent showing ap ggrowth rate of 5.4percent.

▪ Foreign DirectForeign DirectInvestment (FDI) stoodat 815 million dollar(2008-09)

▪ Total investments in thesector stood at 1.7 billiondollar

▪ Telecom imports alsogrew by 20 percent andreached 1 6 billion dollar

29

reached 1.6 billion dollar(2008-09)

Cont’d….

Telecom Sector OverviewM bil S t 2009Mobile Sector - 2009

▪ The mobile penetration reached 59 6 percentreached 59.6 percent of the total population

▪ Total mobileTotal mobile subscribers reached approx. 97 million

▪ Prepaid subscription is 98 percent, whereas only 2 percent subscribers are post-paid

30Cont’d….

Telecom Sector Overview

Mobile Sector - 2009

▪ Revenue: cellular revenues grew by 16 percent and stood atpercent and stood at Rs 212 billion at the end of 2008-09

▪ The mobile investments dropped by 48 percent and

h d 1 2 billireached 1.2 billion dollar

31Cont’d….

Telecom Sector OverviewLL d WLL 2009LL and WLL - 2009

▪Basic services (LL. WLL (

& LDI) showed a healthy

revenue growth rate ofrevenue growth rate of

26 percent contributing

Rs 113 billion to theRs 113 billion to the

sector revenue which is

around 34 percent of thearound 34 percent of the

total telecom sector

revenue

32

revenue

Cont’d….

Telecom Sector OverviewLL d WLL 2009LL and WLL - 2009

▪ With the declining trend in g

fixed line tele-density

reaching 2.2 percent with

a total of 3.5 million fixed-

line subscribers in the

country

▪ Wireless local loop (WLL)

tele-density stands at 1.6

percent with 2.65 million

33

subscribers across

Pakistan

World Top Cellular Subscribers - 2009R k Country or Number of mobile P l i % ofRank Country or

regionNumber of mobile

phones Population % of population

— World 4,100,000,000 6,797,100,000 60.61 China 703,000,000 1,335,330,000 52.652 India 506,044,156 1,175,710,000 43.153 USA 276,610,580 308,505,000 894 Russia 190,000,000 141,915,979 134, , , ,5 Brazil 173,960,000 191,480,630 90.846 Indonesia 140,200,000 231,369,500 60.537 Japan 107,490,000 127,530,000 84.117 Japan 107,490,000 127,530,000 84.118 Germany 107,000,000 81,882,342 130.15

9 Pakistan 96,709,585 168,500,500 59.0310 Italy 88 580 000 60 090 400 147 4110 Italy 88,580,000 60,090,400 147.4111 Mexico 79,400,000 109,610,000 72.4412 UK 75,750,000 61,612,300 122.9513 Vi t 70 000 000 87 375 000 80 11

34

13 Vietnam 70,000,000 87,375,000 80.1114 Philippines 67,900,000 92,226,600 73.6215 Turkey 66,000,000 71,517,100 92.29

Internet penetration and users- 2009I t t I t tCountry Internet user

penetration (%)Internet users

(thousand)

Malaysia 57% 15,300Malaysia 57% 15,300Azerbaijan 41% 3,500Indonesia 14% 33,000Mongolia 13% 400

Pakistan 11% 19,000Uzbekistan 10% 2 800Uzbekistan 10% 2,800Tajikistan 10% 650

India 8% 95,000Sri Lanka 7% 1,400Armenia 6% 200

Afghanistan 2% 500

35

Afghanistan 2% 500Nepal 2% 550

Turkmenistan 1% 80

Investment Opportunities in - IT

E- Government Projects

` IT Enabled Services

Call CentersCall Centers

Back Office

GIS Mapping (geographical information system)(geographical information system)

Software Design/ Testing

36Industrial Automation Projects

Cont’d….

Investment Opportunities in - IT

Content Development

Software Products

Distance Learning /Distance Learning / IT Education & Training

Electronic Media

Information SecurityInformation Security

Bureau Services

37

Hardware and Internet Equipments

Investment Opportunities In TelecomUpgrading the Billing Systems

Rural Telecommunications

Value Added Services & Content Services

Data Communications

Internet Protocol TelevisionInternet Protocol Television

Vehicle Tracking System

3 G / 4 G Networks

Low Fixed Line Teledensity

38

Low Fixed Line Teledensity

Cont’d….

Investment Opportunities In TelecomM-Commerce

Advent of Mobile Banking

Tele Medicine and Tele Sale & Purchase

Mobile sets manufacturing

Tele Marketing and Video Conferencing

Network Solution Providers

Underground Exchanges

Telephone Exchanges with DMS

39

p g

Outsourcing and Franchise

Concluding RemarksRaising capital through the stock exchange to expand operations andintroduce new products and services is a tested model of growth anddevelopment.

Adoption of innovative models by the telecom sector to benefitinvestors, general public and the consumer.

The model of expanding business operations through expandingownership and sharing profits with the people is an example worthemulating by the investors.

Expanding of the networks to low teledensity areas and taking thedevelopment revolution a step forward by bringing the under developedregions at par with the urban centers of the country.

Pakistan’s economy remains resilient and Karachi Stock Exchange hasbecome one of the best performers among major emerging markets.

40

Pakistan ranked among the seven attractive emerging markets offering awide range of investment opportunities.

Board of Investment is your one stop shop to address all your investment enquiries

O t ff d t i t dOur staff are ready to assist and facilitate you in helping to achieve your goals and drive Pakistan towards progress andPakistan towards progress and prosperity

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