Sources have revealed that the Pakistan Democratic Movement (PDM)-led government has approved a significant economic policy to attract foreign investments as the country seeks new avenues for financing.
The federal cabinet recently gave its approval to the Pakistan Investment Policy 2023, aiming to attract $20-25 billion in investment. Consultations with institutions such as the World Bank, International Finance Corporation, and provincial and federal bodies were conducted to develop this policy.
The new policy eliminates the minimum equity rate for foreign investment, allowing investors from abroad to invest in all sectors, except for six sectors which were not specified.
Additionally, foreign investors will have the ability to repatriate their entire profits back to their home countries in their respective currencies. The sources emphasized that special protection will be provided to foreign investors.
This development follows recent statements made by Minister of State for Petroleum Dr. Musadik Malik, who highlighted Saudi Arabia and the United Arab Emirates’ keen interest in Pakistan’s information technology, agriculture, and mining sectors.
Saudi Arabia is planning to allocate $24 billion for investment, while the UAE has allocated $22 billion to explore opportunities in three sectors of Pakistan.
Pakistan has been grappling with a severe economic crisis and has been actively seeking ways to bolster its reserves. The recent agreement with the International Monetary Fund (IMF) provided some relief, with a $3 billion stand-by arrangement (SBA) in place.
However, global rating agencies maintain that sustaining economic stability and growth will pose significant challenges despite the IMF support.
The country’s economy has been negatively impacted by the COVID-19 pandemic, floods, high inflation, and social unrest. With foreign exchange reserves at a low of $4.46 billion, Pakistan faces substantial external debt repayments, with approximately $25 billion due in fiscal year 2024.