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SAZH-TAF Report on FDI

Trust System - Overview

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A key proponent of this Round Table and Report was participation and ownership of the private sector. Thus, throughout the interviews and Round Table, requests for solutions to the common problems were put before our members. From it a series of solutions came into being that the private members of our Round Table felt could be taken up by them and implemented to create an environment conducive to investment.

 

As a result, our members agreed to work on an investment protection pipeline that could actively work on eliminating the trust deficit investors have in the government, institution, business environment and legal system of Pakistan. In essence, a trust system that could address the substantial deficits in investor confidence.

 

 

The distillation of the key qualities that this Trust System could encapsulate would be:

 

  • A Database of Certified and Trained Experts to guide the Investors;

  • A Dispute Resolution System, which would act as an alternative to the traditional court and litigation system;

  • A Liaison and Coordination Network, which would connect investors with various government departments, chambers of commerce or any other stakeholders. This would minimize misinformation and confusion on policy matters, and provide support to the investor entering a new territory;

  • Guarantee and Vetting system, which would allow investors a level of safety and security. There could be a database and list of pre-vetted/pre-qualified investees from which guarantees and feasibilities could be prepared for potential investors. Another attribute would be the process of an escrow system for transactions, as well as a form of real estate protection.


Our experts, at the Round Table and throughout our discussions, were excited about the prospect of creating our own solutions without being reliant on the lethargy of the public sector. It was accepted, that while the private sector could not solve all the issues on its own, and there was still a massive role of the government in the scope of FDI, we could create patchwork solutions until the state could fix the larger gaps. This would also ferment an identity and ownership over the problem, so that the trust could start from the root, which is the private sector.

 

The above shared components (which have been detailed below) of this trust system could be encapsulated in a single Model Investment Protection Pipeline, which could have one or all of these branches within it, to offer trust and confidence to the investors coming in. A healthy competitive market of such Investment Protection Pipelines would appeal to investors who may be spoiled for choice.


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