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- Pakistan last month reached a bailout loan deal with the IMF which is pending approval from the lender’s executive board
- Approval dependent on “confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”
ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Thursday the federal government was introducing new policy measures to streamline investment processes and provide incentives for foreign investors, Radio Pakistan reported.
The government says it is committed to improving Pakistan’s investment climate as the South Asian country struggles to meet external financial needs to get approval for a $7 billion IMF bailout loan and fights a growing militancy problem.
Last month, Aurangzeb said Pakistan will focus on meeting its external financing needs by speaking with foreign governments and lenders to draw foreign investment as well as seeking loan rollovers. The government is also seeking to focus on more sustainable forms of external financing such as direct investment and climate financing.
Pakistan and the IMF reached an agreement for the 37-month loan program last month. The IMF has said the program is subject to approval from its executive board and obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners.”
On Thursday, the finance minister chaired a review meeting with representatives from joint venture investment companies, including the Pak-Brunei Investment Company Limited and Saudi-Pak Industrial and Agricultural Investment Company in Islamabad.
“Aurangzeb expressed government’s unwavering commitment to creating an enabling environment for private sector investment, recognizing the critical role that joint venture companies like Pak-Brunei Investment Company Limited and Saudi-Pak Industrial and Agricultural Investment Company can play in driving economic growth,” Radio Pakistan said. “He underscored the importance of these ventures in attracting foreign direct investment.”
According to state media, the CEO of the Pak-Brunei Investment Company Limited gave an overview about the portfolio of the company and its major initiatives in Pakistan.
“The role of Pak-Brunei Investment Company Limited in promoting economic cooperation between Pakistan and Brunei by facilitating investments in Industry and Agricultural sectors, through financial services, real estate, and SME’s support was highlighted,” the report said.
The CEO of Saudi-Pak Industrial and Agricultural Investment Company also gave a presentation about the major development initiatives of the company for promoting Islamic finance, food security, digital finance, trade, and agriculture and livestock in Pakistan.
Various aspects of the operations of these companies, including investment strategies, performance metrics, and key impediments affecting their growth, were also discussed.
“Both companies presented their achievements and challenges, highlighting areas that require policy support to overcome obstacles in their operational landscape. The discussion also focused on potential areas for future investments and collaborations through more government-to-government initiatives in order to support priority sectors,” Radio Pakistan said.
“The Finance Minister appreciated both companies and specifically applauded the implementation strategies of Saudi Arabia’s Vision 2030 for achieving their targets within a few years, and stressed that Pakistan is keen on learning those strategies.”
Aurangzeb has held a flurry of meetings with heads of foreign banks and companies in recent weeks in a push to bring in more investment. Last week he held meetings with top officials of Dubai Islamic Bank and Mashreq Bank to “discuss the economic outlook and explore investment opportunities in Pakistan.”
Pakistan is in talks with Saudi Arabia, the United Arab Emirates and China to meet gross financing needs under the IMF program, Aurangzeb said in July following a trip to China to seek energy sector debt reprofiling.
Rollovers or disbursements on loans from Pakistan’s long-time allies, in addition to financing from the IMF, have helped Pakistan meet its external financing needs in the past.
Tough conditionalities placed by the IMF, such as raising tax on agricultural incomes and lifting electricity prices, have prompted concerns about poor and middle class Pakistanis grappling with rising inflation and the prospect of higher taxes.
Bringing in foreign investors may become harder as Pakistan’s security situation deteriorates. On Sunday, separatist militants launched a series of coordinated attacks in the southwestern province of Balochistan, killing over 53 people, including at least 19 soldiers and police. Attacks across the country by religiously motivated groups like the Pakistan Taliban have also been on the rise in recent months.