US waging campaign to get firms to invest in Pakistan

But the woman at the podium was not a financial guru. It was Anne Patterson, the US ambassador to Pakistan, who has made it her mission to persuade American businesses to view the troubled South Asian country not as a haven for Al Qaeda, but a vast untapped market capable of delivering double-digit rates of return.

Just as the State Department is gearing up to spend $7.5 billion in aid to Pakistan over the next five years, US officials are already predicting that the money will not be enough to solve the country’s woes in health, education, energy, and water. So now the State Department is actively trying to sell the idea of investing in Pakistan to Americans.

“$7.5 billion is not chump change,’’ Patterson said at the dinner at Cambridge’s Doubletree Hotel, attended by about 70 people last week. But she stressed, “The real solution is private sector involvement.’’

Pakistan, however, is still considered a big gamble.

Standards & Poor’s, a company that rates risks, gives Pakistan a B-, a low grade shared by Jamaica, Grenada, and Argentina.

Robert Mosbacher Jr. , chairman of Mosbacher Energy Co., said the US government’s efforts to get private corporations to build power plants in Pakistan have been stymied by the approximately $5 billion the Pakistani government owes to local power generators and distributors.

“I don’t think that security is the biggest impediment to investment in Pakistan,’’ he said. “I think it is more the financial capacity of the country at this stage, the political challenges that the country is facing in terms of governance, and corruption.’’

Despite all that, the State Department is aggressively marketing Pakistan as fertile ground for investment. US officials have hired Thatcher + Co, a New York strategic communications firm, which created a brochure listing all that Pakistan has going for it: It’s the world’s sixth-most populous country, with 180 million potential customers. It is English-speaking, democratic, and has a market-driven economy.

“More than 200 international companies are present and succeeding,’’ the brochure says. “There’s room for more.’’

Senior officials of the Overseas Private Investment Corporation, a US agency that encourages emerging markets investment, have made a flurry of trips to Pakistan over the past year to talk about how changes to regulations would attract American businesses.

“Historically, all the way back to the Marshall Plan, we know that foreign direct investment helps not only the countries but it substantially helps US interests,’’ said Rod Morris, OPIC’s vice president of insurance. “You give people jobs and they are a whole lot less likely to become terrorists.’’

US Embassy officials in Pakistan, meanwhile, are considering a proposal backed by Pakistan’s government to use some US aid funds to stimulate private investment, according to the US commercial counselor in Pakistan, William Center.

As part of the US government’s sales pitch, Patterson escorted some of Pakistan’s most powerful executives to Cambridge last week. They attended lectures on entrepreneurship at Harvard’s Kennedy School of Government and dined with a group of potential investors.

At the dinner, Patterson lamented that Americans have shied away from the country, as Saudi Arabian and Chinese investors have stepped up. Even so, foreign investment has plummeted with suicide attacks, electricity shortages, and the global financial crisis. This week, Pakistan’s central bank said foreign direct investment dropped by 39 percent since last year, down to $2.03 billion.

Yet, Patterson portrayed Pakistan as a land ripe with chances to make a profit, despite a travel advisory put out by her own agency.

“If you had gone into Colombia in 2001, ignoring the State Department travel advisory, you would have made a bundle of money,’’ she said.

Patterson, who served as Colombia’s ambassador during a violent time, said the willingness of Colombian-Americans to invest there was the key to success. So she aimed to show the assembled group in Cambridge — most of them Pakistani-American — how some investors are doing. She asked Ali Jehangir Siddiqui, a member of the delegation, to talk about the rates of return he earned for JS Group, a Pakistani private equity fund; he said his fund grew from $65 million to $260 million from 1996 to 2006.

Patterson said too many Americans are afraid to invest in Pakistan because of what she described as misperceptions.

“Mexico and Guatemala have much higher levels of violence by any empirical measure,’’ Patterson told her audience. “The whole Islamic extremism is very alien to many Americans whereas drug traffickers are much more familiar.’’

Tahir Chaudhry, chief executive of NeuroDyne Medical Corp., a Cambridge manufacturer of medical devices that also has offices in Lahore with about 30 employees, agreed.

“The perception is very much exaggerated,’’ he said.

But Chaudhry, founder of the Organization of Pakistani Entrepreneurs in North America, said many Pakistani-Americans are cautious about sinking their personal fortunes back home.

Molly Kinder, a senior policy analyst at the Center for Global Development, a Washington think tank, said US officials are wise to look to the private sector. But she said persuading Americans to invest in Pakistan will require more than a campaign to change the country’s image.

“Investing in Pakistan is a hard sell,’’ she said.

Farah Stockman can be reached at fstockman@globe.com.