Posts Tagged ‘investments’

It has been agreed that “cordial relations” will be maintained between China and Pakistan.  According to Inamul Haq (the country’s former state Minister for Foreign Affairs), everyone is in total agreement on this.  At a recent seminar, he said that Chinese investments and projects in Pakistan had reached $25bn and that this figure was increasing all the time.  He said,I believe that the US will not leave Afghanistan which is a center from where they can watch China, Pakistan, Iran and other important regional players.  Afghanistan is home to billions of gold and copper reserves while same is the case with Pakistan which has untapped reserves of gold, copper, oil and gas worth billions of dollars.”

Efforts by Chinese Government

In addition, according to an article in Dawn Prof. Zhong Rong said the Chinese government had been making significant efforts to “ensure economic development in Xinjiang province.”  The country is about to invest substantial capital in Xinjiang to try and increase the GDP ratio “and per capita income of the people of Xinjiang Province.”

In the last year, Burma was the recipient of $20bn in foreign investments.  Not only is this figure alone  impressive, but it is a huge development when looking at last year’s figure which was $302m.

So where did all of this money come from? Well, according to a recent BBC News article, it seems the Chinese are pretty big fans of Burma, making the largest investment of foreign countries, mainly in power-based projects.  Indeed, according to another Chinese-investment-based news report, Chinese companies have been the financier of a great deal of Burma’s major hydropower projects, despite political unrest in the region.

It has not been an easy ride all the way for China making these investments though.  Nonetheless, according to the Ministry of National Planning Development, its staggering $8.27bn investment from March 2010-11 was substantially larger than the next country in line being Hong Kong at $5.3bn and then Thailand at $2.94bn.

In addition, it was reported that “China is looking only for minerals, they are looking for economic benefit. That is all. That is damaging the country. They are not even making peace.”  So the fact that China has been desperate to make such efforts at pursuing investment returns, no matter what the cost, hasn’t been great for the country.  For sure it on some level makes sense for China to invest in places the West avoids as it doesn’t have to deal with such a high level of competition but still, various events including the work conducted “on the China-backed Tasang Dam in Burma proves that China is not immune from the same geopolitical concerns that keep others from parking their capital in ‘rogue states.’”

Political Impacts

Of course, the political scene is bound to have an impact on all of this too.  When polls were taken in Burma last November, it was the military based parties that won the most amount of seats.  Indeed, just looking at the 2008 constitution, a staggering quarter of seats were anyway reserved for this group.  It might have been just this fact that led to the criticism of polls by western nations and opposition groups; it seems that there is no choice pretty much, but to back a military-based party.

When a country gets a big investment, not only is it good for the company bringing the capital, it’s also great for the recipient country.  Thus, both India and Tata Consultancy Services (TCS)  should be smiling right now, according to a recent report in Money Control.  The AMR contract (automation of metering and billing) has just been awarded to TCS “of high tension industrial consumers in Haryana.”

According to “an official spokesman of power distribution company Uttar Haryana Bijli Vitran Nigam (UHBVN), the contract will involve 3,200 consumers in 11 districts.  These include: Panchkula, Ambala, Yamuna Nagar, Kurukshetra, Kaithal, Karnal, Panipat, Sonepat, Rohtak, Jhajjar and Jind.”

In addition, the project is meant to be finished in the next half a year.  Much of the work will be based on the most up-to-date GPRS technology and is the first time this has been used in Northern India (with the exception of Delhi).

GPRS Use

All the HT Industrial consumer premises will receive GPRS modems and meter data “will be transferred to server installed in Head office at Panchkula through these modems.”  Through the project, the consumers’ meter reading will be “transferred online to the headquarter.”  What’s great about the project is that it will require no human intervention because of the use of “automatic meter reading, billing and regular data analysis.”  As well, there will be the opportunity for close observation of the consumption of electricity that will “help the UHBVN in preventing the losses due to pilferage of power.”

Improved Accounting

In addition, this project is set to improve the accuracy of billing and make savings in manpower.  In addition, the transfer of power factor will be covered, as well as “time of day consumption, tamper events and half load survey data etc.”

When you have money, you can use it to make more money.  That’s how the rich get richer.  And it seems that the largest software services provider in India – Tata Consultancy Services (TCS) – is doing just that.  For the 2011-12 financial year, TCS will be making an investment of Rs 2,300 crore.  Nonetheless, in a report in Money Control, it seems that the company was questioned as to why it hadn’t given out a special dividend.  To which Ratan Tata responded, “it’s true that I could have paid you more this time. But we would also like to have some more liquidity in case we see opportunities to acquire companies. But eventually, you will get more dividend once we do that.”

TCS Attacks

The company has also been attacked as of late too.  But Tata insisted that the investigation of his company for “tax benefits on onshore services,” was unwarranted.  He pointed out that “we have not received any such notice. I am not too sure of the veracity of that report. Unfortunately, people read these reports and assume that they are gospel truth. But that is simply not true.”  Indeed, he also noted how TCS’s attrition rate was on a higher scale than “the industry average.”  He pointed out how well the company motivates its employees, by giving them an opportunity to “bag an overseas assignment, which gives them experience of working abroad. We are the largest when it comes to giving employees overseas assignments. So we do keep them motivated enough.”

Expanding Markets Globally

While it’s true that much of the TCS markets are in North America, the company is now also “in the process of doing more business in Europe and other markets. About revenue from large clients, we need big anchor clients.”

 

According to a recent FKI report (Federation of Korean Industries), there was good news for South Korea vis-à-vis investment opportunities, based on data assembled by the OECD (Organization for Economic Cooperation and Development). Indeed, in an article on the report, the region’s business investment growth “ranked no. 1 among the world’s developed market economies,” in 2010. Now, it just has to keep up this title. Indeed, South Korea’s facility investment escalated 21.3 percent on-year last year which rendered it the “highest increase among 23 countries checked and far higher than runner-up Estonia, which posted investment growth of 14.1 percent.” America came third and Britain, fourth.

South Korea Big Investments

South Korea’s investment in national accounts reached 116.8tr won, with a substantial amount of this being put into machinery and the remainder into transportation-related equipment. Indeed, machinery investment increased more than 26 percent on the grounds of the purchase of additional IT products, autos and manufacturing machinery in a one-year timeframe. Transportation sector investment increased 6.2 percent in 2010; most of this capital was spent on trucks and other autos primarily used for business.

2009 Figures

The financial crisis led to problems in 2009 such as a drop in facility investment in the OECD countries to 19.5 percent but with South Korea it was only 1.2 percent. As well in 2010 South Korea witnessed an additional 2.3 percentage points to last year’s economic escalation vis-à-vis investments in business, which, according to an FKI official, “represented a significant contribution to national growth.”

Gilani Asks for Chinese Investors

Just a few days ago, Yousuf Raza Gilani, the Prime Minister of Pakistan, asked firms in China to “invest in his country’s energy sector,” in an attempt to boost his suffering economy that is facing crisis following last year’s massive floods as well as in general, “weak Western investment.” But he’s not asking this from a charitable point of view. Gilani believes that Chinese companies can really benefit from making this investment, according to what he said last Thursday at a joint business forum held in Beijing. He added that, “joint ventures, with equity participation of Chinese corporations and financial institutions, can transform Pakistan’s economic landscape and would certainly prove to be a win-win scenario.” He also mentioned how beneficial it would be for these Chinese firms to look to Pakistan when developing their business strategies.

Osama’s Unraveling

Gilani made these statements on the third day of his China trip which is just a few weeks after Osama bin Laden was killed on Pakistani soil. This in and of itself is significant since it “rattled US-Pakistan ties and pushed Islamabad closer to Beijing.” Gilani met with his Chinese counterpart Wen Jiabao last Wednesday and the two have both been pushing the development of mutual ties between the countries at a time when his country is feeling the “pressure about whether its security services knew where bin Laden was.”

Economic Excellence

At the end of the day, there is also great potential for trading and profits between China and Pakistan. Indeed, just looking at figures for last year, trade between the day reached $8.7bn which was an increase of 27.7 percent on-year. There has also been substantial collaboration in the energy sector between the two countries. Indeed, just over a week ago, a nuclear power plant that was built with China was opened in Pakistan and Beijing has signed a contract to build an additional two reactors in an attempt to facilitate energy shortages. Since Pakistan has been dealing with substantial power shortages, production has been limited to approximately 80 percent of the country’s needs. Thus these kind of energy agreements are vital for boosting the economy.

Indonesia and Malaysia Join Forces

There have been substantial efforts made to encourage companies from Indonesia to make investments in Malaysia which, has also resulted in a re-balance of “bilateral investment between the two friendly neighbors.” According to Datuk Seri Mustapa Mohamed (International Trade and Industry Minister for Malaysia), various companies from Indonesia have been discussion four memorandums of understanding (MoUs) with four companies in Malaysia for possible investment opportunities there. He pointed out that once negotiations are completed, there will be a signing ceremony in Malaysia.

Business Summit

The Asean-EU Business Summit takes place today along with the Asean Economic Ministers’ Meeting, which Mustapa is attending. He is using these meetings to meet up with various figures in the Indonesian corporate world who are involved in these possible investments.

Origins of Success

The way it all started was when Tan Sri Muhyiddin Yassin, Deputy PM of Malaysia, came to Indonesia and met with industry “captains” in the industry a year ago. This was what led to such an optimistic response from investors in Indonesia. This led to Malaysian companies inviting “Indonesian Chinese corporate figures from the Indonesian Chinese Chambers of Commerce and Industry to Malaysia in February to explore investment prospects in Malaysia particularly in projects slated under the Economic Transformation Program.”

The good news for Indonesia is that the economy has grown so fast. But this has resulted in the country’s businessmen looking for investment possibilities outside of the republic. Now Malaysia has invited Indonesians to use its country “as the platform to set a basin foreign investment.” These days Malaysia is definitely doing better vis-à-vis investments between the two countries as trade is up to over $2bn and Indonesia’s is $600m in Malaysia.

Great Investment Opportunities in Pakistan

Despite the somewhat trying environment in Pakistan, according to Syed Yousouf Raza Gilani, the country’s Prime Minister believes that the country offers amazing investment opportunities for outside investors. Indeed, if you look at the stats, Gilani is probably not wrong. As he claims, the fact that over seven hundred companies have been making such investments in the country proves that it presents “lucrative opportunities.” Otherwise these companies wouldn’t be advancing. In addition, the PM claimed it was merely “propaganda” vis-à-vis his country’s security situation and that foreign businessmen should ignore this and instead choose to “invest in diverse sectors for securing tremendous dividends.”

Gilani Goes Gabbing

So Gilani went to France. Arriving two days ago, he is there to discuss defense and economic matters. There was also a signature on a Memorandum of Understanding between the two countries in an effort to develop a Joint Business Council that is meant to encourage “mutually advantageous trade.”

Despite what Gilani is saying however, there has been concern over rather pricey taxation for those investing in Pakistan. This was also discussed with Hina Rabbani Khar (Pakistan’s Minister of State for Economic Affairs) asking the French entrepreneurs who were voicing this complaint to “provide detailed proposals either directly to the government or through their embassy so that these might be looked into and considered in the next budget.”

Pakistani Perception Problematic

According to Gilani, there are huge misconceptions vis-à-vis what is really going on in Pakistan. He is not happy with how the media has been portraying things and urges them to refocus on what is actually going on with the country and the real issues it is encountering while at the same time battling the country’s problems of terror. As well, French potential investors should come see for themselves; visit the country and check out how investors succeed in Pakistan and have been doing so for years.

So there is a lot of good news in Pakistan. Despite what the media portrays and what we thus see on our TVs, when it comes to investment opportunities, rather than believe what we see/hear, if we are serious about making a rupee or two then we need to take a plane to Pakistan ourselves.

It seems that the China-Mongolia border is set to be getting a coal processing project which will “better use coal imports from the Republic of Mongolia.” China’s biggest coal producer – China Shenhua Energy Co – has just set out plans at an estimated cost of 10 billion yuan for this venture. Construction has already started in the Ganqimaodu Customs Processing Park.
Ganqimaodu Customs is a major energy imports gateway between China and the Republic of Mongolia, handling a staggering 7.71 million tons of coal imports in 2010. In addition, it has been said that the Shenhua project is set to have a “coal washing ability of 6 million tons per year, coking capacity of 2.4 million tons a year and an annual capacity of producing 4.8 million tons of methanol and 30,000 tons of tar, respectively” by 2012.

Major Mongolian Economic Reform

This new investment project doesn’t stand alone vis-à-vis economic reform in the Republic of Mongolia. Economically, the region is set to undertake significant change over the next ten years, especially vis-à-vis the mining field with its huge reserves and potential for a “mining mania” and Mongolia’s reaction to it all. The recent Mongolia Economic Reform focused on how best to cope with this transition. What remains to be seen is how the country will deal with it all and how its other industries – most notably agriculture (its largest industry) will cope with “a strengthening currency and Chinese competitiveness is squeezing even this most basic of industries.”

So while there is good news for Mongolia vis-à-vis the coal processing project with China, there is always more to the story. Mongolia has other issues with which to deal that are impacting its region on a day-to-day basis.

Increased Investment Opportunities for Armenia

Good news for Armenian investments. According to the country’s parliament chairman, Hovik Abrahamian, attempts are being made to push for investments in the transport and energy sectors throughout the BSEC countries.* As well, the greater cohesion between BSEC member countries, the better for all, especially since this is the current goal of the National Assembly of Armenia. This is bound to lead to an increase in investment opportunities for the country.

Armenia Develops Iranian Energy Cooperation

When Armenia attempts to work with Iran, according to Armen Movisyan (the former country’s Energy Minister), around 80 percent of cooperation between the two countries comes from the energy sector, at an estimated volume of $450 million. If a third transmission is built and a hydroelectric power plant on Araks River, this will further connect the two countries which could also ultimately lead to the goal of establishing a “North – South” transport corridor.

Armenia and Energy Security

According to Sevak Sarukhanyan (Armenia’s Deputy Director of Noravank Foundation), “energy security is the most important issue for Armenia, as the country was probably the first state in CIS and the post-Soviet area to be hit by a severe energy crisis.” The two factors that basically led to this crisis were the closing of the Metasmor nuclear power plant in the late 1980s and the shifting of the country’s energy production to thermal power plants utilizing natural gas and fuel oil.

So it does seem today that there is much work to be done in terms of political and economic cohesion between Armenia and other BSEC countries, as well as Iran. At the end of the day – political affiliations and aspirations aside – most countries want the best for their citizens and that usually means working with neighboring countries to acquiesce the best investments.

*Established in 1992, the BSEC comprises Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey and Ukraine with Austria, Germany, Egypt, Israel, Italy, Poland, Slovakia, Tunisia, France, the Confederation of European Energy Charter and the International Black Sea having observer status.