- Pakistan approves major economic policy to attract $20-25 billion in foreign investments.
- All sectors open to foreign investors except for six, as minimum equity rate abolished.
- New policy grants special protection and allows repatriation of profits for foreign investors. Saudi Arabia and UAE interested in investing billions in Pakistan’s sectors.
Pakistan Approves New Investment Policy to Boost Foreign Inflows
ISLAMABAD: The government of Pakistan, led by the Pakistan Democratic Movement (PDM), has given its approval to a significant economic policy aimed at attracting foreign investments, according to sources from Geo News. The cash-strapped nation is actively seeking new avenues for financing, and the federal cabinet has granted its approval to the Pakistan Investment Policy 2023 through a circulated summary. This policy aims to attract an estimated $20-25 billion in investments.
Consultations were held with various institutions, including the World Bank, International Finance Corporation, and provincial and federal bodies, in the preparation of the policy. Sources familiar with the matter stated that under the new policy, the minimum equity rate for foreign investment has been eliminated. Foreign investors will have the opportunity to invest in all sectors, with the exception of six sectors that were not specified.
Foreign investors will also have the freedom to repatriate their entire profits abroad in their respective country’s currency, providing them with special protection, the sources added.
This development follows recent remarks by Minister of State for Petroleum, Dr Musadik Malik, who revealed that Saudi Arabia and the UAE have expressed a keen interest in investing in Pakistan’s information technology, agriculture, and mining sectors. Saudi Arabia plans to allocate $24 billion for investments, while the UAE has set aside $22 billion for exploring opportunities in three sectors of Pakistan, as stated by the state minister during an interview with a private television channel.
Pakistan has been actively seeking ways to bolster its reserves as it grapples with a severe economic crisis. Although the government recently reached a deal with the International Monetary Fund (IMF), which provides some relief through a $3 billion stand-by arrangement (SBA), global rating agencies maintain that the country still faces significant obstacles in achieving economic stability and growth.
Pakistan’s economy has been severely affected by the coronavirus pandemic, floods, high inflation, and social unrest. With foreign exchange reserves at a critically low level of $4.46 billion, the country faces the challenge of high external debt repayments in the coming years, with approximately $25 billion due in fiscal 2024.
Published in PakWeb, July 08, 2023.
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