Post-SIFC Pakistan, The State’s Promise, Performance, and Policy Gaps

Special Investment Facilitation Council (SIFC) is a high-level decision making and investment promoting body formed by the Government of Pakistan. It comprises of federal and provincial ministers, prime minister and special representation by the military and day to day activities carried out through Board of Investment (BOI). This is aimed at bringing continuity, predictability and speed in the policymaking process particularly in priority sectors like defense, agriculture, minerals, energy and information technology.

Since its inception, SIFC has focused on security as one of the main areas of appeal of direct foreign investment. Such projects as Reko Diq have necessitated the provision of greater security due to their presence in Balochistan and special forces have been deployed. The security funding sometimes has caused implementation strains due to delays and cost overruns. Technical reforms (minimizing approvals, red tape), fast-track investment mechanism, and economic diplomacy (using Pakistan missions overseas) have also helped to build investor confidence.

Green Pakistan Initiative (GPI) is a program implemented by SIFC with an aim of modernization of agriculture, particularly in the previously marginalized areas such as Cholistan. Within the framework of this initiative, a model farm (Smart Agri Farm) covering 5,000 acres has been designed, as well as research and center services in agriculture. Green Agri Malls have also been created where one can get seeds, fertilizers, pesticides and modern farming machinery (including drones) at subsidized or hired rates; 4.8 million acres have been surveyed so far about 0.9 million acres have already been given.

Reko Diq, a giant undeveloped copper-gold mine in the globe, is at the heart of Pakistan’s minerals push. The project will bring massive value to its existence, and massive foreign funds will be mobilized. Phase one will be ready to start production in 2028. Mineral diplomacy through SIFC entails policy prioritization, foreign investment enticement, legal and security framework negotiation as well as credibility of contracts and agreements to external investors.

SIFC is driving industrial revival through the PPPs, creation of special industrial zones, reduction of regulatory pressures, and targeting of the energy industry, defence production, and the ICT sector. These moves involve quicker certifications, lower administrative hurdles as well as direct interventions in the energy and chemical industries.

Smuggling, hoarding, and informal economic activities have been stated to have a zero-tolerance policy. These measures involve tightening law enforcement, customs and institutional reforms to formalize sectors. Measures of currency are less recorded in the sources which are to be found in anything like particular detail, but the increase of investor confidence suggests some attention to the stabilization and foreign exchange.

These integrations of Pakistan into global supply chains of minerals and energy, strategic location and economic diplomacy with GCC countries, foreign investment in defense, and agriculture, promote strategic independence and geopolitical arrangements.

The inflows of FDI have been rising and energy sector, which has been significantly growing, has reportedly recorded very high percentage change in investment. In the agricultural sector, in Cholistan, the Green Pakistan Initiative has transformed thousands of hectares and developed Agri Malls and modern farm infrastructure, enhancing the availability of inputs. Reko Diq has lined up tens of billions of dollars of committed funding; is expected to have tens of billions of free cash flow throughout its lifespan. Less red tape: industrial project approvals were also reported to be reduced and time was also cut under SIFC facilitation.

Transparency and Level Playing Field is a concern, many deals are being transacted without proper competitive bidding or disclosure to the public. Reko Diq was an earlier case that has been criticized to be too muddy, non-transparent deals and big arbitration fines. It is feared that the big investors (which in most cases are foreign) are favoured on priority and the small/local companies suffer.