Islamabad:
To promote domestic and foreign investment, the government has adopted a new investment policy for 2023 that will attract investors by adopting best practices and creating an optimal investment environment.
The policy was formulated in line with the establishment of the Special Investment Facilitation Council by Prime Minister Shebaz Sharif. The Special Investment Facilitation Council is a top-level body that includes military secretaries and state premiers. The Council’s objective is to facilitate foreign investment and remove barriers to investment inflows.
The Pakistan Investment Policy (PIP) 2023 has been given the go-ahead by the Union Cabinet through the distribution of briefs. The new policy is expected to attract between $20 billion and $25 billion in investment over the next few years. The policy has been developed in consultation with the World Bank, the International Finance Corporation, state and federal agencies. According to a copy of the policy Dawn has seen, the policy is based on his four main pillars.
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Reducing business costs, streamlining business processes, facilitating business transactions through the creation of industrial clusters and special economic zones, and promoting integration between trade, industrial policy and monetary policy.
The new policy removes minimum capital requirements for foreign investment and allows foreign investors to invest in all sectors except casinos, consumer alcohol production, arms and ammunition, nuclear power, high explosives, currency and mining. be done. In addition, foreign investors can remit all profits abroad in their home currency and receive special protection.
Under the new policy, foreign investors can lease land without restrictions and transfer land they own without restrictions. Restrictions on foreign property developers will be lifted and the distinction between foreign and domestic developers will disappear. Foreign investors are also allowed to own 60% of shares in agricultural projects and 100% of shares in agricultural businesses.
The guidelines include simplification of regulations, guidelines for establishing an investment grievance mechanism for resolving investment disputes, mechanisms to provide incentives based on performance and location, investor protection in fund transfers, expropriation, fairness and equity. and focus on entrepreneurial freedom. in the country
The development follows recent comments by Oil Minister Musadiq Malik, who said Saudi Arabia and the United Arab Emirates have shown strong interest in Pakistan’s information technology and agriculture.
Saudi Arabia has allocated US$24 billion for investment purposes, while the UAE has allocated US$22 billion to explore opportunities in these areas, the minister said in an interview with a private TV channel.
GDP ratio to investment
According to the World Bank, Pakistan’s GDP-to-investment ratio is expected to fall from 15% in 2020 to 13.3% in 2024. PIP 2023 aims to reverse this trend by gradually increasing the net foreign direct investment (FDI) ratio from an average of 15% to 20%.
Pakistan’s economy is becoming less and less complex, according to the Economic Complexity Index. In 2020, Pakistan ranks 93rd out of 146 countries, an improvement from 100th in 2019 but down from 89th two decades ago. Increased foreign direct investment is expected to improve Pakistan’s economic complexity by diversifying export-oriented products and services and helping Pakistan generate higher export earnings through value-adding activities.
Pakistan’s economy has been hit hard by the coronavirus pandemic, floods, high inflation and political instability. Foreign exchange reserves are currently at $4.46 billion, but foreign debt service will remain high over the next few years, with about $25 billion due in 2024.
