The federal Cabinet has approved a policy for attracting foreign investment which has basically removed any remaining restrictions on foreign investors, not just allowing investors repatriation of profits in their own currency, but opening up the real estate and agriculture sectors. The policy also envisages the government reducing the cost of doing business, streamlining business processes, facilitating ease of doing business throÂugh the creation of industrial clusters and special economic zones, and promoting greater conÂvergence between trade, indÂustrial, and monetary policies. It is expected to bring in $20 billion to $25 billion worth of foreign direct investment in the coming few years.
However, if the government at its end is supposed to reduce the cost of doing business, it may well need all parties which might form part of the government to agree to a Charter of the Economy. All investors, not just foreign, need continuity of policy, and cannot be guaranteed by a government heading towards dissolution, as the present government is. Reducing the cost of doing business also involves cleaning up the bureaucracy, so that investors are not constantly having to pay bureaucrats backhanders. Strong accountability mechanisms must also be in place to prevent corruption by political decision-makers, and for that too, an intra-party agreement will be necessary.
As bitter experience has shown with the China-Pakistan Economic Corridor, attacks on foreign projects may also be carried out by militants, often enough with the help of inimical powers. Pakistan has not only had to try and satisfy Chinese investors about the state of security in the country, but has also had to scrabble to show other foreign investors that it is safe. It is to be be assumed that the presence of the COAS on the Special Investment Facilitation Council, which played a significant role in the drafting of the policy, is intended to show that security personnel will be made available where needed. It is to be hoped that this policy will be implemented, and not consigned to files in a storeroom, because its success is essential if Pakistan is to escape the kind of debt trap it faces at present, and which makes it obliged to service its loans by borrowing afresh. The creation of new industries, and thus both the provision of jobs to its burgeoning population and the generation of growth, will only be possible by earning more foreign exchange by exporting more. This demands that the policy succeed, which is only possible if there is dedication and commitment.
