The Government of Pakistan authorised the formation of the Special Investment Facilitation Council (SIFC) on 20 June 2023 as a one-window platform to encourage Foreign Direct Investment (FDI) in the country by enabling investors, ensuring collaboration between state departments and expediting decision-making and project development. While the country’s economy struggles to stay afloat, any attempt to salvage the scenario is welcome. The Council has garnered much positive attention, with some concern regarding its organisational structure.
On 8 September 2023, the Apex Committee of SIFC held its fifth meeting with the primary goal of improving the country’s larger commercial and investment environment, which is crucial for reviving the economy. The Prime Minister presided over the meeting, which the Chief of Army Staff, Federal Cabinet, Provincial Chief Ministers, and other high-level government representatives joined. The ministries presented their blueprints for tackling macroeconomic impediments, governance-related obstructions, and issues in regulatory apparatuses to draw internal and external investments and boost economic advancement. The committee discussed various short-, mid-, and long-term actions to achieve the desired outcomes.
Finance Minister Shamshad Akhtar and other federal ministers in caretaker positions held a press conference in Islamabad to discuss the Council’s meeting. She highlighted that the interim government prioritises the revival of the economy and views removing import restrictions for all sectors as crucial, given Pakistan’s heavy reliance on imports. The acting Power Minister, Muhammad Ali, stated that vital negotiations were conducted in the SIFC meeting on the electricity prices and energy issues. He shared that the interim government was deliberating on inviting bids for 24 offshore oil and gas blocks in the first phase of December.
The rationale behind having considerable military participation in the SIFC stems from geopolitical factors and the intention to garner investors’ confidence.
In terms of future investments, much of the inflow from entrepreneurs and business groups worldwide is likely to be in emerging technologies. Likewise, business stakeholders are expected to move labour-intensive industries from advanced to developing economies. Pakistan, a country with a population of 249.5 million and 64% young people, has excellent potential as a global technology destination. However, the state needs to offer a streamlined and supportive mechanism to attract businesses, facilitating, incentivising, and encouraging their establishment. Thus, SIFC is meant to serve the purpose of unlocking FDI capacity for technology purposes as well.
Updating the foreign representatives of the country on the development, the Foreign Secretary at the Ministry of Foreign Affairs organised an online orientation meeting on the SIFC on 11 September 2023 at the Ministry of Foreign Affairs for Pakistan’s Missions abroad. Dr. Jehanzeb Khan, the Special Assistant to the Prime Minister on Government Effectiveness, delivered a comprehensive presentation updating the Heads of Missions regarding the formation, legal groundwork and different facets of the Council. During the briefing, the Special Assistant discussed the importance of the Heads of Missions’ contributions to the success of the SIFC initiative. He emphasised investment opportunities in Pakistan, specifically in Information Technology (IT), Agriculture, Energy, and Mining. The Heads of Missions were asked to encourage their host countries to take advantage of Pakistan’s abundant resources and investment potential. The participating Missions provided feedback and suggestions tailored to their respective countries and regions on how to move forward with the SIFC initiative.
As a result, the widely talked about SIFC has made progress in drawing multibillion-dollar investments from the Gulf countries and other sources. To date, the SIFC has recognised and sanctioned 20 projects, with nine of them transformed along the requisite model by now. Additionally, the SIFC is planning to conduct a study on the availability of lithium in Pakistan and discover joint investment opportunities in Afghanistan. The Council has also agreed upon a strategy for lawmaking on corporate agreements and cooperative farming on private land. This includes provincial regulation to protect land rights and dispute resolution, creating a special unit at the Security and Exchange Commission of Pakistan (SECP), dedicated courts to resolve conflicts, tax holidays, incentives, and risk mitigation, special authorities at provincial levels, and trial prototypes in all provinces.
Operationally, SIFC, by combining the knowledge and resources of both civilian and military leaders, intends to strengthen its position as a powerful entity in drawing investments. The Council has received positive feedback from various sections of society, including political stakeholders, economists, and journalists, for its contribution to economic revitalisation.
However, military representation in the Apex Committee of the Council can lead to some apprehension regarding the possibility of decreased civilian supervision. To prevent undue military influence over pivotal economic policies, careful vigilance is required to manage the subtle interchange between civilian and military domains. However, the rationale behind having considerable military participation in the SIFC stems from geopolitical factors and the intention to garner investors’ confidence.
The military presence in the Council will no wonder ensure a speedy inflow of FDI at the moment. With the military acting as a guarantor, the investments from Riyadh and Dubai are confirmed, underscoring the Gulf states’ doubts about Pakistan’s political continuity and its capacity to uphold commercial contracts during periods of governmental change. Although the military’s representation in the SIFC may offer a perception of stability, it also emphasises the room for far-reaching, enduring policy adjustments to tackle basic structural hurdles. Therefore, in order to ensure that the investments keep coming in in the long run, there is a need to bring about broad-based changes at the policy level that will facilitate investors’ confidence.
Nonetheless, Islamabad is focused on revitalising the national economic scenario. SIFC is expected to assist investment and privatisation in areas such as defence, strategic initiatives, agriculture, forestry, fishing, mining, development, technology, energy and telecommunication, among others. It represents the state’s seriousness towards drawing external and internal investment and reviving the economy. The Council is attempting to undertake all requisite actions to create, motivate and endorse openings for business and investment in the country. Though it is a significant stride towards economic development, the long-term resolution of the financial fiasco and retention of investors’ confidence remains in maintaining a stable sociopolitical order and facilitating long-term advancement by providing a conducive scenario for new businesses.