Economists say that Pakistan wants to get out of economic difficulties through investment from friendly countries, but the government’s institutional system does not allow investment agreements to be converted into practical form.
Haroon Sharif, former chairman of Pakistan Investment Board, says that the Gulf countries want to invest in other sectors to reduce their dependence on oil and Pakistan is an attractive place for them.
While talking to the international media, he said that the expression of interest in investment from friendly countries is welcome, but the lack of ease of doing business, high interest rates and security issues are the main factors that hinder the implementation of investment announcements and agreements. It creates difficulties in giving.
According to him, in the past, due to the lack of good governance and lack of support from government institutions, these investment announcements by the political leadership have been limited to contracts only.
‘Friendly countries are serious about investment but problems remain’
Haroon Sharif said that Pakistan’s relations with Gulf friendly countries ranged from financial assistance, deposits to stabilize foreign exchange reserves, supply of oil on loan repayments, which are now on the way to expand to long-term investments.
Prime Minister Shehbaz Sharif also said in an event during his visit to the Emirates that he does not want a loan from the UAE but joint investment and cooperation for mutual benefit.
Pakistan is keen to strengthen existing cooperation and strengthen strategic partnership with the UAE, including in the fields of information technology, renewable energy and tourism.
Economist Saqib Sherani says past investment deals with Saudi Arabia, UAE and Qatar have been delayed and failed to materialize even after years.
He said that friendly countries are serious about investing in Pakistan, but due to local problems, these agreements cannot be implemented and this situation is still visible.
According to Saqib Sherani, the plans to hand over Saudi Arabia’s oil refinery and three airports to Qatar have not been successful despite negotiations.
Last month, a high-level delegation headed by Saudi Foreign Minister Prince Faisal bin Farhan visited Pakistan. Despite high-level meetings in this visit, no agreement could be reached, Thagoff said.
‘Conditions not favorable for large investments’
Experts say that foreign investment requires reforms that will take time. Therefore, the government should invite profitable companies to partner for immediate foreign investment.
Haroon Sharif said that the efforts of ‘SIFC’ and foreign investment will not prove effective unless the government improves the institutional system by hiring experts.
Last year, the government formed the Special Investment Facilitation Council (SIFC) for foreign investment, which included the army chief besides the relevant government agencies.
The objective of establishing the Investment Council was to facilitate and ensure the implementation of investment from friendly countries.
Haroon Sharif said that the government should offer viable and profitable projects to foreign investors through the partnership of local investors.
Haroon Sharif says that for foreign investment, Pakistan has to create functional economic zones and bring out profitable projects. According to him, it takes a lot of time to start new projects with foreign investment, so the government should attract foreign investors in already existing profitable companies.
Saqib Sherani said that the Gulf friendly countries have been providing financial support to Pakistan since 2018, considering the bad economic situation, but the scope of financial support may have ended now.
He said that for this reason, instead of financial support, only investment is being discussed. But he is not hopeful for any big investment in Pakistan because according to him the situation in the region and the political instability in Pakistan are the main reasons for this.
According to Saqib Sherani, one of the reasons for the postponement of Saudi Crown Prince Muhammad bin Salman’s visit to Pakistan is that the government has not been able to attract Saudi authorities more in terms of investment.
In February 2019, during the visit of Saudi Arabia’s Crown Prince Mohammed bin Salman to Pakistan, Saudi Arabia signed investment agreements worth 20 billion dollars, including the agreement to set up a refinery in the coastal city of Gwadar in Balochistan. However, these investment projects have not been completed yet.
