Special Investment Facilitation Council
| Type | Governmental |
|---|---|
| Purpose | To attract foreign investment and boost the country's economy |
| Location | |
Membership | All Provincial Chief Ministers and the Army Chief |
Chair | Shehbaz Sharif |
The Special Investment Facilitation Council (SIFC) is a government body under constituted under the Prime Minister of Pakistan, (Incumbent, Shehbaz Sharif). The SIFC was established on 20 June 2023 with the stated goal of acting as a "'single window' to facilitate investors, establish cooperation among all Government departments, and fast-track project development."[1] The council consists of all Provincial Chief Ministers, Chief Secretaries, and the Army Chief. The SIFC has been assigned the task of increasingForeign Direct Investment (FDI) in Pakistan to targeted level of $5 billion.[2][3] The SIFC is also notable for the involvement of the Army in joint civil-military economic decision making.[4]
Background
[edit]Following Coronavirus in 2020 foreign investment in domestic bonds "left the country."[5] While in June 2023 FDI fell to a twelve-year low.[6] The establishment of the SIFC is seen as a response to the requirement for economic revitalization during Pakistan's economic crisis, specifically addressing the obstacles posed by bureaucratic red tape and intricate regulations that act as deterrents to foreign direct investment (FDI). With the objective of facilitating smoother collaboration with Gulf Cooperation Council (GCC) nations and raising FDI in different sectors, including agriculture and information technology.[7]
Role and Function
[edit]The SIFC operates as a paramount decision-making platform aimed at spearheading "structural reforms" within the economy. The forum has claimed to focus on using the potential of economic sectors such as information technology, agriculture, energy, mineral resources, mining, and defense production. Another primary objective of the SIFC is stated to be the attraction of investments from friendly nations.[2][8]
Performance
[edit]In February 2024 FDI recovered by 16% ($131 million) after a previous decline in June, IT exports increased by 32% ($257 million) during the month,[9] while domestic banks invested Rs25.60 trillion in government securities, raising the investment-to-deposit ratio (IDR) to "all-time high" of 93%, having been 85% the year before.[10] Increased investment in government securities leading to "positive sentiments" at the PSX after Treasury Bills reached a four-year high in March 2024.[11] According to the State Bank of Pakistan (SBP) short-term external investment increased by 84% (Rs. 501.30 billion), a thirty-month high in May.[12] In July T-bills and equity markets continued to increase in foreign inflows, reaching the "second-highest net inflows in a year in Pakistan’s history"; originating from the United Kingdom, United States, Belgium, Luxembourg, Australia, Bahrain, Ireland, the UAE and the Cayman Islands.[13][14] The same month FDI increased by 17% to $1.9 billion, primarily sourced from China, Hong Kong, the UK, US and Singapore.[15] According to data of the Pakistan Bureau of Statistics, the Special Investment Facilitation Council (SIFC) was responsible for boosting Pakistan’s exports by 10% (to $30.64 billion) in FY2024.[16]
In May 2024, the National Accounts Committee (NAC) reported that Pakistan's investment ratio has fallen to its lowest point in 50 years. With Shahbaz Rana writing that the SIFC has "so far succeeded in addressing coordination issues among federal and provincial governments and removing procedural bottlenecks. However, these efforts have not led to significant increases in either foreign or domestic investment." As well as not being able to realize a Saudi investment pledge of $5 billion.[17] Writing in The Express Tribune Khalil Ahmed commented that FDI growth "does not take into account under what terms and conditions the FDI is brought in by adopting such measures. But this does preclude the possibility of resolving the chronic issues, that the economy of Pakistan faces, always by resorting to short-term and ad-hoc measures, that is, firefighting through the likes of the SIFC."[18]
References
[edit]- ^ "Establishes the Special Investment Facilitation Council (SIFC)". unctad.org. UN Trade and Development. 20 June 2023.
- ^ a b "PM assigns special council $5b foreign investment task". Nation.com.pk. 22 June 2023. Retrieved 2023-09-02.
- ^ "Briefing session for resident Diplomatic Missions held at Foreign Office, Islamabad". www.radio.gov.pk.
- ^ "New 'investment facilitation' council gives Pakistan army formal seat at economic table". Arab News PK. June 21, 2023.
- ^ Iqbal, Shahid (2024-07-02). "T-bills see highest inflows in four years". DAWN.COM. Retrieved 2024-09-13.
Pakistan suffered heavily after the outbreak of Covid in 2020 and almost entire investments in domestic bonds left the country. Since then foreign investors have remained away from t-bills and the long-term Pakistan Investment Bonds (PIBs).
- ^ Siddiqui, Salman (2024-05-14). "External investment surges by 84%". The Express Tribune. Retrieved 2024-09-13.
- ^ "The Special Investment Facilitation Council's Role in Pakistan's Economic Resurgence". thediplomat.com.
- ^ Raza, Syed Irfan (August 8, 2023). "Special Investment Facilitation Council approves key projects to attract investment". DAWN.COM.
- ^ Siddiqui, Salman (2024-03-21). "FDI recovers to $131 million in Feb". The Express Tribune. Retrieved 2024-09-13.
- ^ Siddiqui, Salman (2024-02-27). "Bank financing hits record high". The Express Tribune. Retrieved 2024-09-13.
- ^ "Pakistan's stock market records highest closing as inflation eases, investment in securities increases". Arab News PK. 2024-04-03. Retrieved 2024-09-13.
- ^ Siddiqui, Salman (2024-05-14). "External investment surges by 84%". The Express Tribune. Retrieved 2024-09-13.
- ^ Iqbal, Shahid (2024-07-02). "T-bills see highest inflows in four years". DAWN.COM. Retrieved 2024-09-13.
- ^ Siddiqui, Salman (2024-07-21). "Global investors inject record $581m into T-bills". The Express Tribune. Retrieved 2024-09-13.
- ^ Reporter, The Newspaper's Staff (2024-07-20). "FDI jumps 17pc to $1.9bn". DAWN.COM. Retrieved 2024-09-13.
- ^ Shaikh, Anmol (2024-08-04). "SIFC initiatives fuel massive surge in Pakistan's exports". The Express Tribune. Retrieved 2024-08-18.
- ^ Rana, Shahbaz (23 May 2024). "Investment plummets to 50-year low". The Express Tribune. Retrieved 26 May 2024.
- ^ Ahmad, Dr Khalil (2024-04-29). "Rethinking Pakistan's FDI obsession". The Express Tribune. Retrieved 2024-09-13.