Adding another milestone to its portfolio, the incumbent government in Pakistan is planning to attract as much as $50 billion in Foreign Direct Investment (FDI) by 2023.
The approach is to attract big economies of the world including the United States of America and China to invest in Pakistan in order to avail the opportunities that are available. Foreign Pakistanis are also being incentivized in this investment plan.
Different sectors of the economy targeted under this strategy are agriculture, agro-industry, automobile sector, sports, and textiles.
The industrial sector is already growing, as the Federal Secretary BoI Fareena Mazhar, claimed that Chinese companies have brought $260 million of investment in Rashakai, Special Economic Zone (SEZ) to enhance the growth of the steel sector.
Similarly, 13 different Chinese companies are to sign Joint Venture agreements with 60 local companies as part of the economic development scheme.
Fareena Mazhar also informed that eight honorary investment councilors have been appointed to achieve the agenda of bringing more Chinese investment into Pakistan. The people appointed belong to the business sector and other related fields. These people will help the government in guiding the Chinese investors about potential Joint Ventures.
"Prime Minister Imran Khan has approved the new Bilateral Investment Treaty (BIT) template whereby any dispute will now be remedied through local arbitration" – Board of Investment (BoI) Secretary @fareena_mazharhttps://t.co/k3rtARUVNU pic.twitter.com/vbVNWisEU0
— Board of Investment, Pakistan (@investinpak) July 12, 2021
This is done to make the business environment more favorable for Pakistan and to set a new direction for modern industrialization.
Advantages for the SEZs
The four approved Special Economic Zones (SEZs) are Rashakai in Nowshera, Dhaba, Bostan, and Allama Iqbal Industrial City, Faisalabad. The development of these areas is the top priority of the government in order to create better business opportunities for foreign investment.
All of these regions will have widespread socio-economic effects as more investment would lead to more employment opportunities as well as export-led growth. Fareena also said that Pakistan’s ease of access with China will allow these SEZs for mutual economic advantages and enhance bilateral trade and economic connectivity.
She also said that the Rasakai SEZ holds a unique significance due to its proximity to the first juncture of the CPEC route, with vast resource and manufacturing bases in the region.
Pakistan has acquired $3 billion in the previous FY 2020-2021 and the government is working towards bringing more investment in the potential sector in the years 2021-2022. The target FDI for years 2021-22 is $3.7 billion and $4 billion for years 2022-23.
The secretary has also informed that the government has set a target to complete BoI reforms at the district and country-level through Pakistan Regulatory Modernization Initiative (PRMI). The process of the reforms will be done in three tiers from mapping to analysis to guillotine hence executing the regulation from gross route to national level.
Another initiative to increase the FDI in the coming years is through the identification of priority sectors after selective structural scanning.
Read more: Pakistan’s Economy: long term direction?