Ayesha Saba

Pakistan needs to prioritize structural reforms and improve the investment climate in order to create a favourable environment for both domestic and foreign investors, Talha Jalal, Senior Research Analyst at the Pakistan Business Council, told WealthPK. “The current foreign investment policies are not very attractive. Availability, reliability, and the cost of infrastructure facilities are essential ingredients of a business environment conducive to foreign investment,” he said. “Absence of a long-term strategy leaves Pakistan without a clear roadmap for attracting and retaining foreign investment. Lack of political will further exacerbates the situation, as consistent support from government leaders is vital for creating investor confidence and stability,” he said. As Pakistan explores various strategies to attract investment, particularly FDI, the Pakistan Business Council (PBC) has recently recommended that the Special Investment Facilitation Council (SIFC) prioritize and transform the investment climate.

The PBC suggested that the SIFC promote economic transformation in the sectors targeted for FDI and address generic and long-standing weaknesses in the ease of doing business affecting both foreign and domestic investors. Creating a transparent and predictable business environment is essential for attracting long-term investments that contribute to economic development and job creation. “It is crucial to facilitate the existing infrastructure and support local investors. Simplifying regulatory processes, reducing bureaucratic hurdles, and offering financial incentives are essential steps to empower the local investors, stimulate economic activity, and promote entrepreneurship in the country,” he stressed. Talking to WealthPK on the condition of anonymity, an official from the Board of Investment (BoI) said, “Promoting FDI in Pakistan faces several significant hurdles, which have impeded the nation's ability to fully tap into its economic potential.

These challenges span various domains, encompassing political, security, bureaucratic, and economic aspects, and collectively hinder Pakistan's ability to attract substantial FDI.” He said the establishment of SIFC is a critical step towards attracting FDI across various sectors. The council is designed to streamline and expedite the investment process, thereby enhancing Pakistan's appeal as an investment destination. Pakistan has a vast potential for foreign investment in agriculture, mining and minerals, information technology, energy, and defence production. “A policy is being devised to boost IT exports, encourage joint ventures, and bring foreign investment into the sector. Saudi Arabia is currently undergoing a significant transformation through its ‘Vision 2030’ initiative, which aims to diversify its economy. Pakistan and Saudi Arabia have closely collaborated to enhance bilateral trade and pledged to increase investment deals by $5 billion. Investment is also being secured from other Gulf states to bolster the economy,” he said.

Credit: INP-WealthPk