In today’s world, ideas and concepts are changing rapidly. Countries are now fighting their battles on economic fronts. A country with healthier economy is a strong country and FDI plays an important role in strengthening the economy. Due to political uncertainty and rapidly changing situation in the region and its resultant effects on its economy, Pakistan recorded FDI inflows of just US$1.3 billion in the 11-month period from July 2022 to May 2023, down 21 percent from the previous year after a decline in both: remittances and exports.
This called for a comprehensive approach including review of laws, business practices, and government regulations to facilitate growth and economic development. In this backdrop a plan was developed to utilise the untapped potential in key sectors such as defence production, agriculture, livestock, minerals, mining, energy and information technology, locally and in cooperation with friendly countries.
For this purpose, the government of Pakistan established a Special Investment Facilitation Council (SIFC) to act as a ‘single window’ for multi-domain cooperation in related sectors with GCC Countries in particular and other friendly countries in general. The government extended a special invitation to the Chief of Army Staff to join the high-level committee to combine the expertise and resources of both civilian and military establishments. SIFC was hailed by all sections of society as an important step towards economic recovery.
SIFC has set a five-year horizon for its investment targets. These targets are complex and overarching in nature and require a longer timeframe to achieve; hence, are not easily divisible into monthly or quarterly goals. The council recognizes the importance of creating a supportive environment for investments. The initial months of the plan are dedicated to laying the foundation for an investment-friendly ecosystem. This involves policy changes, infrastructure development and other measures to attract and facilitate investments. There are issues or conflicts related to investment projects that need to be resolved. The council is prioritizing the resolution of these long-standing problems before proceeding with other investment activities. This indicates design to promote long-term sustainable and successful investments and commitment to clear obstacles that hinder investment opportunities.
The Council is making significant progress in attracting investments and driving various projects. Some details of milestones achieved thus far are:-
The council has signed a significant Memorandum of Understanding (MoU) worth 1.5 billion with a Chinese company, for the up-gradation of Pakistan Refinery Limited. This demonstrates a commitment to infrastructure development and foreign investments in the country.
The council is focusing on agriculture and livestock corporate farming, particularly in Cholistan, where 60,000 acres of land has been prepared for this purpose. Additionally, it is working on strengthening the seed development framework that is essential for ensuring increased productivity and growth in the agricultural sector.
The mining sector, too, is a significant area of focus. Copper mining is planned for Chagai, while iron ore and salt mining projects are in progress in Punjab and other parts of Balochistan. The development of mineral resources can have a positive impact on the local economy and provide valuable resources.
Incentives have been provided to the Information Technology Sector, including measures such as a 50% repatriation of forex, debit cards, and workspaces for freelancers. This encourages the growth of the Information Technology Industry, job creation, and foreign exchange earnings.
Several initiatives in the energy sector are being undertaken such as determining solar tariffs, equalizing gas prices and realizing strategic pipeline projects like Tajikistan, Afghanistan, Pakistan and India (TAPI) gas pipeline. These efforts aim to enhance energy availability and security in the region.
The fact that the council is currently working on resolving investment-related issues for approximately 100 domestic companies indicates a proactive approach to clearing obstacles and promoting local investment. This kind of support and facilitation can go a long way in encouraging domestic businesses to expand and invest further, ultimately contributing to economic growth and job creation within the country.
Effective engagement with domestic investors and resolving their issues reflect a holistic strategy for economic development that takes into account both—local and foreign investments—, creating a balanced and thriving investment ecosystem. It’s important for the council to continue its efforts in this direction to ensure the sustained growth of the local economy.
Pakistan is in dire need of attracting foreign investors and establishment of SIFC is a right step towards that goal. The Council with the support of Pakistan Army, hopefully, would be able to overcome the challenges and transform Pakistan’s economy resulting in improvement of the lives of ordinary Pakistani citizens.
Copyright Business Recorder, 2023