OUR sinking economy has been assigned a new crew, but what does this new crew know about navigating a catastrophic storm? Clearly, very little. The plan it has come up with is little better than asking the ship’s band to play a new tune while the storm outside rages on.

Though the new Special Investment Facilitation Council sounds great in theory, it cannot achieve its goals by simply offering a secure bubble for foreign investors to operate in. After all, any business that wishes to operate in the country needs to be organically embedded in its larger economy in order to thrive.

The SIFC has to promise a fundamental change in the way business is done in this country. Unfortunately, as the PDM government’s unimaginative budget for the next fiscal year has signalled, there seems to be little appetite for actually setting our house in order before inviting foreign investors into it. This, primarily, is what makes its plan appear outlandish rather than revolutionary.

Click to see more

For perspective: Pakistan received foreign direct investment inflows of only about $1.3bn in the 11-month period from July 2022 to May 2023. This represented an almost 21pc decline in FDI compared to the previous year.

In the same period, foreign investors were prevented from receiving the profits and dividends from their investments outside the country. At least $1bn in profits were blocked by the government from being repatriated in this period.

This limitation had to be placed because the government was running out of foreign exchange due to a sustained drop in exports and remittances received from overseas Pakistanis.

In other words, foreign investors were made to suffer over policy failures that were entirely the government’s own. Now, the same decision-makers responsible for that fiasco would like to sell ‘preferential access’ to the Pakistani state to foreign investors. How many will take them seriously?

“The immediate task [for the SIFC] is to increase foreign direct investment to $5bn,” the prime minister said in a Tuesday tweet. That is well more than thrice the level of annual FDI expected to be recorded by the end of the outgoing fiscal year.

One would expect the country to become at least three times better for doing business if it wishes to attract three times more investment, yet Islamabad’s priorities have lately seemed to be something else entirely.

Our senators this week moved legislation that will give current and former Senate chairpersons outlandish new perks in addition to the ones they already enjoy.

These perks will come at the expense of the nation’s rapidly depleting resources. How safe would any foreign investor feel sinking their money into a country which doesn’t seem to respect the limitations of its own reality? That is the key point to ponder.

Published in Dawn, June 22nd, 2023