a huge market that cannot be ignored

LAHORE:

The Government of Pakistan has stepped up efforts to boost foreign direct investment (FDI), with particular emphasis on boosting investment in the development sector, to rehabilitate ailing industrial units.

These initiatives are part of a broader strategy aimed at revitalizing economic growth, creating jobs and positioning Pakistan as a competitive player in the global market.

“Pakistan is a market of around 225 million people and it is difficult to ignore such a huge market for a longer period of time,” commented Ahmad Subhani, an investor based in the Middle East, speaking to The Express Tribune.

The only issue facing international investors in Pakistan is sustainability, both politically and financially.

“In recent years, the country has fallen far behind on both counts, but now it seems that the government is stepping up when dealing with political and economic issues, especially its good relations with the International Monetary Fund these days and incentives for international investors is putting the country back on the radar of investors,” he added.

Subhani pointed out that aggressive investment promotion campaigns have been launched in key markets such as China, the Middle East and Europe. These campaigns highlight Pakistan’s strategic location, resource base and favorable investment climate.

The government has introduced a number of incentives to attract FDI, including tax exemptions, streamlined approval processes, land grants for industrial projects and the establishment of single window functions at the Board of Investment (BOI). These measures are designed to reduce bureaucratic hurdles and create a more investor-friendly environment.

Apart from this, the establishment of SEZs across the country is a key component of the FDI strategy, a government official said. These zones offer state-of-the-art infrastructure, tax breaks and simplified regulatory procedures.

Important SEZs include Rashakai Economic Zone and Allama Iqbal Industrial City, which have already attracted significant foreign investment, he added.

Brownfield investment, which involves redeveloping existing industrial sites, is a priority for the government. These investments are seen as a quick and effective way to boost industrial capacity and employment. Key sectors targeted for investment in the manufacturing sector include manufacturing, textiles and agriculture, the official pointed out.

The energy sector has been a major beneficiary of FDI and brownfield investment. Projects such as the renovation of thermal power plants and the expansion of renewable energy capacity have received significant foreign investment. These projects will add 2,000 megawatts of capacity by 2025, addressing the country’s energy shortages.

Significant investments to upgrade the country’s telecommunications infrastructure, especially fiber optic networks, and investments in modern agricultural techniques and processing facilities are expected to increase agricultural productivity by 20 percent over the next five years, the official added.

According to economic experts, if the ongoing measures of the Shehbaz Sharif-led government gain momentum, the country’s GDP is projected to grow by an average of 5.5% annually over the next five years. This growth will be driven by enhanced industrial production, technological advancement and improved infrastructure.

“Seeking large amount of FDI is vital for any country, but providing incentives and facilitation to overseas Pakistanis to set up industrial units in Pakistan should also be given priority as there are thousands of overseas Pakistanis who want to export products from Pakistan to destinations where they are currently,” said Sheikh Tahir Imran, a Pakistani overseas investor.

“I am interested in setting up a fabric stitching unit in Pakistan and then exporting such products to the US market. Why should I buy from India or Bangladesh, instead of buying or ideally setting up my own textile manufacturing unit in Pakistan,” Imran said.

“Just like big investments, the government should also focus on facilitating and revitalizing small and medium enterprises as a large number of overseas Pakistanis are interested in such units. This will create a win-win situation for both the expatriates and the government, thereby signaling a new dawn for Pakistan’s economy.”

Published in The Express Tribune, May 21^St2024.

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