ISLAMABAD: Former chairman, Board of Investment, Haroon Sharif has disclosed that Pakistan could not materialize $30 billion investment commitments for identified specific projects from Saudi Arabia and Qatar because of fragmented bureaucratic structure and response.
He also threw light on certain causes for his resignation under the PTI government, saying that economic policy inconsistency, insecurity of some personalities, resistance from bureaucratic structure, continued informal intervention at the political level for nominating investment ambassadors/ministers abroad without prior knowledge had mainly contributed to his decision to quit. He said he preferred to tender his resignation in a “dignified manner” and his decision proved correct after witnessing the ouster of some technocrats in an unceremonious way from their positions in recent days.
“The way bureaucracy was capturing policy space, I was getting increasingly concerned about my own professional credibility by not being able to deliver on fulfillment of committed projects. In my last one-on-one meeting with the PM, I had requested him that without his visible lead, this bilateral huge investment opportunity will not be materialized and sadly the same had now happened,” Haroon Sharif said in an exclusive talk with The News here on Tuesday.
He said the bureaucratic vested interests started opposing him when he proposed to PM Imran Khan to insulate priority projects by establishing a Special Unit under him for undertaking all spadework to finalize $30 billion projects and then the ministries concerned should move ahead with the formal signing of these deals. He said the bureaucratic structure lacked capability to move at desired pace of corporations so there is a need to overhaul and bring changes in it to develop the capacity to place multibillion-dollar commercial transactions on grounds.
Pakistan so far lured bilateral investment historically on the basis of using geopolitical positioning but not because of commercial value proportion to strike any deal. When he visited these countries along with the PM, he said Pakistan received deposits keeping in view the balance of payment difficulties. He recalled that he had raised the sustainability of these deposits and proposed at that time that these deposits should be converted into private equity funds and gave them shares into projects to ensure sustainability.
He said the second proposition was to sign a long-term economic and investment framework with these friendly countries where the role of the Board of Investment comes in and subsequently framework agreements were developed. Pakistan and Saudi Arabia signed five specific agreements including the establishment of a refinery, alternative energy projects and sale of some projects through privatization deal. “Pakistan and Saudi Arabia had agreed on $21 billion investment for these five specific projects” he added. In the case of Qatar, the size of investment was relatively small in the range of up to $10 billion as they were interested to get two LNG plants. They were extremely keen to invest in airports to make them modern and commercially viable by making them corporate entity and thirdly they wanted to invest in the food sector. “The PM successfully opened up space for investors and as the BoI chairman, he made efforts to identify specific projects but unfortunately it could not be materialized due to lack of absorptive capacity.
He said he had made a month-wise chart to materialize privatization for two RLNG power plants with envisaged dead line of June 2019 but it could not be done till now. He said that now two years were going to over so he intended to write analytical policy pieces about it for throwing light about reasons leading towards failure in mineralizing this investment opportunity.
He said if Asad Umar remained the Finance minister and changes in BoI were not made, he could say with confidence that Pakistan could materialize at least $5 billion projects for investment easily. The consistency of policy and continuation of professional linkages is key to deal with most Asian and Middle Eastern countries, he maintained.
When asked about reasons for his resignation, he said bureaucratic hurdles, insecurity of some colleagues and continuous second guessing of his work by irrelevant people close to power circles were among the major reasons. When asked about the perception that his differences with Advisor to PM on Commerce and Investment Abdul Razak Dawood resulted into his resignation, he said yes and added that he had policy and approach-linked differences and the advisor was a businessman but not a public policy technocrat who had worn many hats such as advisor to PM on Commence, Industries and Investment and he accepted more responsibilities than his capacity so ultimately some positions got back as the minister for Industries was appointed. Thirdly, the BoI law clearly states that the institution should report to the Prime Minister’s Office and more layers were created so he resisted it because investors did not like increased layers of bureaucratic structures.
He said that during his stay as BoI chairman, he developed two narratives with the help of PM Imran Khan as first of all, it was conveyed that wealth creation was a good thing as bureaucratic mindset considered that all wealthy people did some wrong to earn wealth. Secondly, he said the world was conveyed that Pakistan was open for business and ease of doing business was significantly improved as Pakistan achieved 28 notches improvement on account of Ease of Doing Business Index of World Bank. There are structural barriers to foreign investors like policy inconsistency, weak property rights and lack of effective dispute resolution.
