KPC Review

Kuwait to invest in Pakistan

The potential and highly profitable investment sectors offered by Pakistan to Kuwait include oil and gas, mining, trading and energy

KUWAIT is planning to undertake large investments in a variety of projects in Pakistan, as well as boosting bilateral mutual trade with it, and in the entire region, benefiting from the central position of the two countries located at the crossroad of Europe and Asia.

These plans were announced during the just-concluded Pakistan visit of Kuwaiti Prime Minister Shaikh Jaber Al Mubarak Al Hamd Al Sabah. The talks were held between the Kuwaiti Prime Minister and his Pakistan counterpart Nawaz Sharif, as well as top level Ministers and officials of the two sides. Key chief executives of the major investment, industrial, and business corporations also participated.

Prime Minister Al Sabah conveyed to Prime Minister Sharif good wishes of Amir of Kuwait His Highness Shaikh Sabah Al Ahmed Al Sabah for the people and government of Pakistan. “Kuwait is committed to further strengthen brotherly ties between the two governments and the people. Pakistan has been a trustworthy friend and the people of Kuwait regard Pakistanis in high regards.”

Prime Minister Sharif reaffirmed “the importance Pakistan attaches to the brotherly relations with Kuwait because our relations are marked by growing trade, and close cooperation in defense sector.”

“Kuwait also hosts a large Pakistani community, including labour, which is making positive contributions to the developing of Kuwait. Pakistanis are sending remittances which support Pakistan’s economy as well. The two countries should develop deepening investment ties to impart a greater vigor to the economic partnership between the two countries,” Sharif also said.

“At the moment 120,000 Pakistanis are working in Kuwait and are engaged in growth and development. They have made a solid contribution to the economy of Kuwait.”

Sharif briefed the Kuwait Prime Minister regarding his current plans and priorities for revival of Pakistani economy, with high priority to the energy sector, and the role Kuwait can plan in facilitating Pakistan in these plans. Sharif’s remarks come at a time as Kuwait takes over the chairmanship of the Gulf Cooperation Council (GCC). He requested Kuwait to take a leading role to persuade other GCC countries to provide Pakistan with an opportunity to increase its trade with all the GCC member countries.”

Kuwaiti Deputy Prime Minister and Foreign Minister Shaikh Khalid Al Hamd Al Sabah, during the talks, extended his country’s support for a greater number of Pakistani skilled workers to be able to go to Kuwait and participate in the country’s economic development. An agreement to this effect was also signed during the present visit of the Kuwait leadership.

Pakistan also invited Kuwait to take “maximum advantage from Islamabad’s Special Economic Zone, or SEZ where all infrastructure facilities and utility services will be available. The government allows a 100 per cent repatriation of all dividends and profits, earned by foreign enterprises, and even the invested capital.

To lay down the main groundwork to move into these areas in a big way, the two sides signed four MoUs, including those in the areas of investment, labour, extradition and visa waiver. The Kuwaiti investors coming to establish financial institutions, businesses and industries in the SEZ will benefit from a range of facilities.

These include the provision that all capital goods, machinery and plant, and equipment will receive a one-time tax exemption from a number of custom duties. No income tax will be charged for the first ten years. This was spelled out to the Kuwait government leaders and private sector investors, in the visiting delegation, by Muhammad Zubair, Chairman Pakistan Board of Investment. Zubair headed the Pakistani team to the Pakistan-Kuwait Business Forum which was organis wed alongside the visit by Prime Minister Al Sabah. The Kuwait business delegation was led by Bader Mohammad Al Saad, managing director, Kuwait Investment Authority.

The two sides discussed expansion in business relations, especially in agriculture, energy, and trade. The annual bilateral trade among the two countries is at present $4 billion, which they decided to expand. The balance of trade is heavily in Kuwait’s favour as Pakistan imports a large quantity of petroleum products from Kuwait. Kuwait is Pakistan’s third largest economic partner in GCCC countries, and a key source of petroleum products.

“Kuwait’s direct investment in Pakistan, over the last five years, totalled $ 154.2 million which does not reflect the real potential,” BoI managing director Zubair said.

The potential, and highly profitable investment sectors offered by Pakistan to Kuwait include oil and gas, mining, trading, energy, information technology, telecoms, “halal” food, infrastructure, and small and medium businesses.

Kuwait Deputy Prime Minister and Foreign Minister Shaikh Khalid Al Hamd Al Sabah, and Tariq Fatemi, Special Foreign Affairs Adviser to Sharif, addressed the meetings of the delegations of the two countries. Shaikh Khalid said, Kuwait wants to “raise the level of investment and trade with Pakistan, by participating in Pakistani economic projects.”

The Boards of Investment of Kuwait and Pakistan have signed an agreement on promotion of investment under which Kuwaiti investors will be encouraged to invest in a large number of sectors that have now been opened for the private sector. Private investors of the two countries will regularly interact with each to identify and implement new projects.

Kuwait government informed Pakistan that it will continue to supply crude oil and refined products on deferred payment on a long terms basis. Kuwait Prime Minister informed Pakistani Finance Minister Ishaq Dar, who requested this help to continue, to prepare a draft proposal to provide the oil facility, which Kuwait will favourably consider. Kuwait also informed Dar that the state-owned Kuwaiti Exploration & Production firm the Kuwait Foreign Petroleum Exploration Company (KUFPC) wishes to work in oil and gas sector of Pakistan.

A number of Kuwait exploration and production companies are also interested to work in oil and gas sector of Pakistan, Dar was informed.

The two countries are working on visa issues and these will be resolved shortly. Kuwait will also help Pakistani skilled workers because “we need them to help our development.” Under the agreement 150 Pakistani medical doctors will be employed in Kuwait. The number will rise to, 1,000 in the next phase. On the defense and military cooperation, it was decided that 2,000 Pakistani army personnel will work with their Kuwaiti colleagues in different fields, Prime Minister Shaikh Jaber said.

Prime Minister Shaikh Jaber is very upbeat regarding investment, industrial and business plans, he has finalised with Pakistan.

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