Capital Suggestion
Foreign investment
By Farrukh Saleem
The News, September 3, 2006
General Electric is the world's largest Transnational Corporation or TNC (defined as an 'enterprise that manages production establishments or delivers services in at least two countries'). General Electric has already invested more than $260 billion in foreign countries and employs 150,000 outside its home country. General Electric is based in Fairfield, Connecticut, U.S.A.
Is GE looking at Pakistan as an investment of choice?
According to a travel advisory dated April 7, 2006, issued by the United States Department of State, Bureau of Consular Affairs: "Al-Qaeda and Taliban elements continue to operate inside Pakistan....... Their presence, coupled with that of indigenous sectarian and militant groups in Pakistan, continues to pose potential danger to American citizens. Continuing tensions in the Middle East also increase the possibility of violence against Westerners in Pakistan. As security has tightened at official US facilities, terrorists and their sympathisers have demonstrated their willingness and capability to attack more vulnerable targets, including facilities where Americans are generally known to congregate or visit, such as hotels, clubs, restaurants, places of worship, schools, or outdoor recreation events.
On March 2, 2006, a suicide bomber detonated a car packed with explosives as a vehicle carrying an American foreign service officer passed by on its way to consulate in Karachi. The diplomat, the consulate's locally employed driver and three other people were killed in the blast; 52 others were wounded. In September 2005, McDonald's and Kentucky Fried Chicken restaurants in Karachi were bombed, resulting in multiple injuries. Another bomb was detonated near American and other businesses in Karachi in November 2005, killing three people and wounding 15 others.
US citizens who travel to or remain in Pakistan despite this travel warning are encouraged to register with the embassy's consular section or the consulates in Lahore, Peshawar, and Karachi. US citizens in the country should take appropriate individual precautions to ensure their security and safety. These measures include maintaining good situational awareness, avoiding crowds and demonstrations, as well as keeping a low profile, varying times and routes for all required travel and ensuring that travel documents and visas are valid. From time to time, any post in Pakistan may temporarily suspend public services for security reasons. Official Americans may be prohibited from travelling to certain areas of Pakistan due to security concerns. Therefore, they may not be able to render immediate service to American citizens in distress. Tribal unrest and separatists in Balochistan have turned increasingly dangerous since a series of attacks in December 2005." The Department of State further advises that "Due to on-going concerns about the possibility of terrorist activity directed against American citizens and interests, the Department of State continues to warn US citizens to defer non-essential travel to Pakistan. The US Embassy in Islamabad and the consulates in Karachi, Lahore, and Peshawar continue to operate at reduced staffing levels. Family members of official Americans assigned to the embassy in Islamabad and to the three consulates in Pakistan were ordered to leave the country in March 2002 and have not been allowed to return."
Ford Motor Company and General Motors are the world's third and fourth largest TNCs, respectively. Ford and GM are both American. Can Ford or GM justify investing in Pakistan? Then there's Exonmobil, ChevronTexaco, Pfizer, IBM, Procter & Gamble and Hewlett-Packard -- all large foreign investors. Would they be willing to commit serious capital to Pakistan?
Vodafone Group Plc is the world's second largest Transnational Corporation (TNC). Vodafone has already invested more than $240 billion in foreign countries and employs more than 47,000 outside its home country. Vodafone services 170 million customers worldwide and is headquartered in the Vodafone House, Newbury, UK. Remember, the UK is Pakistan's fourth largest trading partner and the largest foreign investor.
Is Vodafone looking at Pakistan as an investment of choice? Are British companies looking at committing serious capital to Pakistan?
According to Britain's Foreign & Commonwealth Office: "There is a high threat from terrorism and sectarian violence throughout Pakistan. On March 2, 2006, a bomb exploded outside the US Consulate in Karachi, killing several and injuring about 50 people. In 2005, there were a number of bombings in Karachi and Lahore, including at locations frequented by Westerners. We advise against all travel to areas where there are ongoing reports of military or militant activity. There is reliable evidence that terrorists continue to target Western, including British, interests and individuals throughout Pakistan. Although the major cities are particularly vulnerable to indiscriminate bombing and other attacks, including kidnapping, no part of Pakistan is immune. Owing to high levels of security at Western embassies, international organisations and international hotels, more vulnerable targets such as clubs, restaurants (including Western style fast food outlets), places of worship and schools are also at risk. Some bomb attacks have involved consecutive explosions.
There are intermittent surges in sectarian violence throughout Pakistan. Incidents often escalate quickly and have included murders and suicide bombings. Criminal violence, including armed car jacking, robbery, kidnap and murder, is common, especially in Karachi. Travellers have been offered drugged food and then robbed. You should be very careful about, and confident of your personal security arrangements throughout your visit. Beware of the risk of street crime and take personal security measures. Take particular care to safeguard your passport and bankcards, particularly when travelling by public transport and when walking in crowded areas. There is an active black market in forged and stolen passports. Credit card fraud is common."
The fifth largest TNC is British Petroleum Company Plc. Then there's Glaxo, British American Tobacco and Cadbury Schweppes, Anglo America, National Grid and Rio Tinto; all some of the largest foreign investors on the face of the planet. Are these companies going to commit any serious investments into Pakistan when their own governments tell them that "there is a high threat from terrorism and sectarian violence throughout Pakistan" and that "criminal violence, including armed car-jacking, robbery, kidnap and murder, is common, especially in Karachi?"
According to Australia's Department of Foreign Affairs and Trade: "We advise you to reconsider your need to travel to Pakistan at this time due to the very high threat of terrorist attack and the unpredictable security situation. If you do decide to travel to Pakistan, you should exercise extreme caution. We continue to receive reports that terrorists are planning attacks against a range of targets, including places frequented by foreigners. Recent credible reporting indicates a potential terrorist threat against Western hotels in Islamabad. Recent reports suggest that terrorists are planning attacks against Western, including Australian, individuals and interests in Peshawar, but we emphasise that attacks could occur at any time, anywhere in Pakistan." I really want to believe that some of the largest TNCs don't look at travel advisories to make their investment decisions. But, I would be dead wrong. If your government tells you that you can't even visit a country how much money will you be willing to invest in that country? Yes, some foreign investment will come our way but no serious dollars, to be sure. The Global Business Policy Council has compiled a Foreign Direct Investment Confidence Index. As per the index, the most sought after investment destination is China followed by India and then the United States ('investor enthusiasm for China and India is at an all-time high').
The writer is an Islamabad-based freelance columnist. Email: fa rukh15@hotmail.com
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