Mr. Razi-Ur-Rehman agreed to the suggestions made by the CSF and informed the delegates that the SECP has finalized a framework for Venture Capital in Pakistan, which will be issued by the end of March this year. Chairman SECP asked the CSF to provide its assistance in establishing Venture Capital in Pakistan by bringing in international expertise. Mr. Rehman also suggested that the CSF should form an informal implementation group on Venture Capital comprising the stakeholders to identify key issues and the way forward.
The meeting was in reference to the mandate of CSF to reposition Pakistan’s economy on a more competitive global footing. CSF in collaboration with the World Economic Forum in the Global Competitiveness Report of 2007-2008 has identified that the lack of Venture Capital and Equity Finance weakens the competitiveness of Pakistan’ economy.
Arthur Bayhan informed the Security and Exchange Commission of Pakistan (SECP) that on Venture capital Availability, Pakistan ranked at (89) as compared to India (29), China (71), Malaysia (18), Vietnam (64) and Thailand at (51) among the 131 countries that the World Economic Forum (WEF) assessed in the Global Competitiveness Report 2007-2008. Mr. Bayhan also informed the SECP that Pakistan's economy has yet to attain its full potential and growth of the Venture Capital industry may help reach this potential.
The meeting also discussed the way forward to improve the venture capital in Pakistan. The Competitiveness Support Fund (CSF), a joint initiative of the United States Agency for International Development (USAID) and Ministry of Finance, Government of Pakistan is working closely with the Pakistan Business Council (PBC) to promote Venture Capital in the country.
Highlighting the importance of venture capital in Pakistan, Salim Raza, Chief Executive Officer of the Pakistan Business Council (PBC) said that ”Pakistan presents a number of investment opportunities, especially in Energy, Engineering, Agriculture and Health sectors”. Mr. Raza further elaborated that the identified sectors are supported by very favorable and rapidly improving conditions in the market and country's investment policies are generally recognized as some of the most favorable in the region”.
CSF along with the Pakistan Business Council highlighted the importance of creation of a vehicle for Venture Capital. Acting as a catalyst to promote venture capital in the country, it would also take the SMEs to a higher level of growth.
To support the knowledge based economy and economic growth in Pakistan; CSF has a special window on business incubator/ venture capital for which CSF will be working closely with relevant stakeholders in the public and private sector along with the academia and the media. This facility will lead to the creation of business incubators and provide funding for them.
CSF in collaboration with the Pakistan Business Council will also support the Securities & Exchange Commission of Pakistan in its efforts to improve the legal framework surrounding Venture Capital.
Support for CSF is part of the $ 1.5 billion in aid that the US Government is providing to Pakistan over five years to improve economic growth, education, health and governance.