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The national economy is at an important confluence. It has a huge debt, reduction in foreign exchange reserves and a burden of slow behavior. Once the other governments have begun expensive measures to attract foreign direct investment (FDI), but the results have been disappointing. China-Pakistan economic transit, once praised as a $ 62 billion game changer, has failed to provide promised change.
The Special Investment Facility, which is developed for the Fast Track FDI, has proved another bureaucratic exercise in signing a memorandum without concrete results. Even the recent staff level agreement with the International Monetary Fund emphasizes structural weaknesses that prevent serious foreign investors. It is also understandable to expand local investors.
The main flaw in Pakistan’s point of view is in failure to admit that high -level announcements and picture opportunities are needed to attract investment. The CPEC is an excellent example of this. Although government Chinese businesses have completed some infrastructure projects, private investors have been away from security concerns, regular challenges, complex tax systems and bureaucratic red tapes.
Attacks on Chinese citizens, including 2021 Dasu bus bombing and 2022 Karachi University attack, exposed failure to provide a safe environment for Pakistani investors. Instead of tackling these systematic security challenges, the government relied on temporary measures such as military escort, which work very little to assure long -term investors.
The disappointing performance of the SIFC has further exposed our poor investment policy and its permanent failures. The Council, which was developed in 2023 with too much dhoom dham, aims to cut through red tape and attract investment from the Gulf countries in the agriculture, mining and energy sectors. Yet, despite the big claims of investors in Saudi Arabia and the United Arab Emirates, visible investment is ridiculous.
The shadow of past failures is in large numbers. The Rico Deck Koning dispute, which costs Pakistan billions of dollars, should work as a permanent reminder of the dangers posed by foreign investors.
Without a strong legal reservations and a transparent solution to conflict, SIFC cannot overcome any amount of trust in the establishment, which causes Pakistan’s investment environment.
The current staff -level deal with the IMF has highlighted these permanent structural weaknesses after the first review of the current $ 7 billion program. Although the deal provided the short -term breathing room, the situation of the IMF, including financial stability, reform of the energy sector and better governance emphasizes the fundamental changes needed to attract sustainable investment. Emphasizing the “rebuilding of external buffers and eliminating deterioration”, Pakistan’s permanent disqualification is properly exposed to creating a friendly environment for investors.
The deal includes a new 28 -month program with the convenience of flexibility and stability, which aims to resilience, the area where Pakistan has failed to attract significant green investment despite the risk of climate change.
The meeting between Finance Minister Mohammed Aurangzeb and Russian Deputy Prime Minister Alexei Overchuk has exemplified the tendency to give more optics over Pakistan’s substance in the Boo Forum. The talks about energy cooperation and the North-Sanoba Transport Corridor are expected, but such diplomatic engagements are rarely translated into concrete investment.
History is recruited with similar high profile meetings, which benefits very little in terms of real capital influx. The Economic Coordination Committee further shows the virtual approval to increase the Riko DIQ project and the facility of Skido Sports further indicates the disconnection. These decisions indicate specific projects but do nothing to improve the overall investment environment.
The IMF program offers important opportunities to demonstrate real change. Whether the leaders of Pakistan have had the opportunity, it is yet to be seen.
Pakistan’s first green bond starts an extraordinary bright location, which has the potential to finance climate. However, this isolated success cannot compensate for systemic failures in economic diplomacy.
The country’s foreign policy apparatus has been trapped in a passing period, in which many ambassadors serve as a glorious postman rather than a business and investment promoter.
Unlike India’s aggressive India’s global campaign or the infinite investment of Saudi Arabia’s vision 2030, there has been little step in organizing trade exhibitions, investor conferences or road shows in Pakistan’s diplomatic missions.
The absence of the Foreign Minister from the major global forums probably represents the most clear failure. At a time when economic diplomacy should be Pakistan’s top priority, the Foreign Minister is clearly absent from international forums where investment decisions are made. This neglect is quite the opposite of countries such as Vietnam and Indonesia, whose leaders personally court for investors and actively renew the global image of their nations.
Pakistan’s investment drought solution is in the fundamental reform, not in any other bureaucratic committee or in a high level signing ceremony. First of all, Pakistan must establish reliable legal security measures for investors, including protection against a strong resolution of the dispute and the changes in discretionary policy.
Second, the government must empower and reorganize its diplomatic corpuses, in which the business ambassadors replace the ambassadors on business and investment in promoting business and investment. Third, Pakistan needs to develop a specific investment strategy related to the sector, targeting industries where it has competitive benefits, such as textile, agriculture and renewable energy.
The IMF contract provides a temporary lifeline, but for real economic recovery, foreign investment will need to be attracted, which increases exports. It demands more than policy announcements. It requires a fundamental change on how Pakistan reaches investment promotion.
The government must move its dependence on China and actively beyond the court investors from Europe, Southeast Asia and the Middle East. It has to address security concerns that prevent private investment and implement governance reforms, which demand international partners.
The time for Pakistan to reform its investment environment is coming to an end. About 60 % of the loan service covers government taxes and foreign exchange reserves barely two months of imports, Pakistan cannot afford failed steps and another decade of lost opportunities. The choice is clear: It must either implement real reforms or face long economic stagnation to attract investment.
The IMF program offers important opportunities to demonstrate real change. Even if the leaders of Pakistan will occupy this opportunity, it is yet to be seen.
Without a significant FDI and local investment, Pakistan will be trapped in the IMF bailout and economic crisis. The ability to fulfill the promises of reform of the government will determine whether the country can break the cycle and be on the path to sustainable development.
For now, evidence suggests that authorities prefer short -term reforms over export -based investment, the fundamental changes needed to attract domestic and foreigners, which has repeatedly failed the strategy, and as long as an example is a shift and practical approach.
The international community, including multilateral institutions and potential investors, are closely watching to see if Pakistan is finally ready to learn from its past mistakes. Successful components are available in the form of a large user market, strategic location and young manpower. However, without real basic structural improvements, these benefits will remain unpredictable.
The economic future of Pakistan depends on the consent of the implementation of the difficult changes needed to counter the strict truths and to become an attractive investment destination. Half -hearted measures and empty promises have passed. Only brave, permanent and concrete steps can change Pakistan’s investment directions, and instead of borrowing more careless, can secure its economic future through FDI and local investment growth through local investment.
Dr. Ikramol Haq, the author and the Supreme Court’s lawyer, is an affiliated teacher in the Lahore University of Management Sciences.
Abdul Rauf Shakuri is a corporate lawyer based in the United States.
