In pursuit of revitalising the economy and placing it on a sustainable trajectory, an ambitious 'Economic Revival Plan' was unveiled in June 2023. This long-term strategy seeks to harness the untapped potential of Pakistan's 240 million population and resource-rich land by welcoming foreign direct investments. Notably, Gulf and Middle Eastern states are integral to mobilising essential funds and ensuring the timely realisation of feasible projects. The program prioritises local development and expedites the implementation of pipeline projects. The Economic Revival Plan envisions Pakistan as a trillion-dollar economy by 2035, surpassing the scale of the $60 billion China-Pakistan Economic Corridor (CPEC). (12) It aims to attract $100 billion in foreign direct investment (FDI) over the next five years while transitioning the economy towards an export-oriented model. The initiative aims to create employment opportunities for approximately 75 million individuals, directly and indirectly, and increase export targets to $70 billion while gradually reducing imports. What sets this effort apart is the establishment of the Special Investment Facilitation Council (SIFC) as an enduring one-window operation, eliminating bottlenecks and bureaucratic hurdles, and signifying stability and commitment to the initiative's success. (13) This innovative endeavour united leaders from both the civil and military sectors, including the prime minister, army chief, provincial governors and federal ministers. The primary aim was to establish a centralised platform simplifying interactions with investors, promoting cooperation among government entities, and expediting project development processes. The SIFC adopted a comprehensive approach involving all government branches and stakeholders to streamline bureaucratic complexities in business operations. Its main goal was to attract local and international investments, unlocking Pakistan's potential across vital sectors such as defence manufacturing, agriculture, mining, information technology (IT) and energy. Notably, Saudi Arabia and the United Arab Emirates committed significant investments of $25 billion in Pakistan over the next two to five years. (14) Furthermore, in July 2023, Pakistan initiated the establishment of the Land Information and Management System - Centre of Excellence (LIMS-CoE). (15) This endeavour focused on enhancing modern agricultural practices on over 9 million hectares of currently untapped state-owned land. It is noteworthy that Saudi Arabia demonstrated its commitment by providing an initial funding injection of $500 million for this project. The Pakistan Army's Director General of Strategic Initiatives will oversee the operations of this specialised centre, which aims to collaborate with countries such as Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and China on various agricultural initiatives geared towards bolstering Pakistan's export capacity.
In addition to these endeavours, Pakistan explored the possibility of divesting equity in the Reko Diq mines, home to one of the globe's largest reserves of gold and copper, to Saudi Arabia. This initiative underscored Pakistan's determination to harness its abundant mineral resources, which are estimated to be of astonishing value, totalling $6 trillion. (16) Strategically situated in the southwest region of Balochistan, the mines are on the verge of commencing production in December. August 2023 marked the convening of the Pakistan Minerals Summit, themed "Dust to Development: Investment Opportunities in Pakistan", in Islamabad. This collaborative event, organised in partnership with Canada's Barrick Gold Corporation and facilitated by Pakistan's Ministry of Petroleum, brought together global investors and industry experts. The summit's purpose was to explore the vast array of business prospects within Pakistan's mineral-rich landscape, with the aim of unlocking the latent potential of Pakistan's mineral sector, offering a myriad of investment opportunities.
Other strategic initiatives include the delegation of airport management to Qatar and the United Arab Emirates, (17) expediting the privatisation of the national airline and advancing comprehensive discussions on the Comprehensive Economic Partnership Act (CEPA), a free trade agreement with the United Arab Emirates. Additionally, in a significant development in June 2023, Pakistan finalised a substantial investment deal with AD Ports Group, a leading Emirati port operator. This agreement strengthened maritime industry ties between the two nations, focusing on enhancing trade and commerce. Under the 50-year concession agreement, the group took over the operation of the Karachi Gateway Terminal Limited (KGTL) at the Karachi Port Trust (KPT). (18)
The partnership also involved substantial investments in the terminal's infrastructure and superstructure, with a major portion allocated for 2026. This collaboration marked a significant milestone in bolstering port facilities and trade connectivity between Pakistan and the United Arab Emirates.
What is worth noting in all these initiatives is that the military, which had traditionally operated from the background, is now taking a proactive and visible role at the forefront, actively participating in and ensuring the security and successful execution of these projects. This is illustrated by the active involvement of the Chief of the Army Staff (COAS) in the upper echelons of the SIFC. This strategic move is designed to bolster investor confidence and underscore the commitment to providing a secure business environment. During the fourth apex committee meeting of the SIFC in September, the COAS reiterated the army's wholehearted support for the caretaker government, emphasising the pivotal role of security in facilitating economic growth and attracting foreign investments.
The immediate horizon may witness a certain level of economic stability in Pakistan due to ongoing efforts. However, the medium- and long-term economic outlook remains largely unchanged. The persistent absence of substantial economic reforms, notably the failure to address undertaxed sectors like retail trade and real estate, continues to present formidable challenges. These persistent issues underscore the recurring economic crises plaguing Pakistan, prompting contemplation of whether the nation's sheer size renders it "too big to fail". This perception has permeated the upper echelons of Pakistani society, influencing decisions that recurrently compel the nation to seek assistance from international organisations and benevolent countries. Until these elites fully grasp the unsustainability of the current status quo, Pakistan's persistent crisis, which has been characterised by decades of stagnation, will endure.
- Shahbaz Rana, “0.3% economic growth rate debunked”, The Express Tribune, 26 May 2023, https://tinyurl.com/36f2szcf (accessed 26 September 2023).
- “Pakistan’s unemployment rate to hover around 8% in FY24”, The Nation, 25 July 2023, https://tinyurl.com/3yz2xehj (accessed 26 September 2023).
- Sana Jamal, “Over 450,000 Pakistanis leave country in search of better jobs abroad in seven months this year”, Gulf News, https://tinyurl.com/5n94ck2n (accessed 26 September 2023).
- Soumya Bhowmick, “Unraveling Pakistan’s economic crisis”, Asia Times, 22 June 2023, https://tinyurl.com/42tv9azt (accessed 26 September 2023).
- “IMF Reaches Staff-level Agreement with Pakistan on a US$3 billion Stand-By Arrangement”, International Monetary Fund, 29 June 2023, https://tinyurl.com/ycytykre (accessed 26 September 2023).
- Khurshid Ahmed, “Moody’s warns Pakistan could default without IMF bailout”, Arab News Pakistan, 9 May 2023, https://tinyurl.com/4e472cvx (accessed 26 September 2023).
- Zarar Khan, “Pakistani traders strike countrywide against high inflation and utility bills”, AP News, 2 September 2023, https://tinyurl.com/yu9hbxnk (accessed 26 September 2023).
- Urooj Imran, “‘Unexpected’ decision: Why did SBP maintain the interest rate?”, PT Profit, 14 September 2023, https://tinyurl.com/4ssy64pf (accessed 26 September 2023).
- Ahtasam Ahmed, “The Road To 300: The Pakistan Rupee’s Dramatic Fall”, The Friday Times, 23 August 2023, https://tinyurl.com/4mbymtzt (accessed 26 September 2023).
- “Pakistan’s general election may be delayed by new census”, Al Jazeera, 5 August 2023, https://tinyurl.com/bdfenv2h (accessed 26 September 2023).
- Mubarak Zeb Khan, “After Saudi inflow, UAE deposits $1bn with SBP”, Dawn, 13 July 2023, https://tinyurl.com/mv45326x (accessed 26 September 2023).
- “ECO REVIVAL PLAN – SIFC MEETING”, Office of the Prime Minister of the Islamic Republic of Pakistan, 20 June 2023, https://tinyurl.com/56bfemmu (accessed 26 September 2023).
- “Vision, Mission and Mandate”, Special Investment Facilitation Council, https://tinyurl.com/54d69yst (accessed 26 September).
- Mehreen Zahra-Malik, “Saudi Arabia, UAE to invest $25 billion each in Pakistan in 2-5 years — PM”, Arab News, 5 September 2023, https://tinyurl.com/2eune7f5 (accessed 26 September 2023).
- “PM launches system to revolutionise agriculture”, The News International, 8 July 2023, https://tinyurl.com/57864fev (accessed 26 September 2023).
- Saima Shabbir, “'From dust to development': Saudi delegation aims to tap Pakistan’s $6 trillion worth of natural deposits”, Arab News, 2 August 2023, https://tinyurl.com/6h2n4zze (accessed 26 September 2023).
- Kashif Imran, “Pakistan plans to outsource operations of three major airports to UAE, Qatar”, Arab News Pakistan, 7 Janaury 2023, https://tinyurl.com/32vacyry (accessed 26 September 2023).
- Shahbaz Rana, “Two more Karachi port terminals to be signed off to UAE”, The Express Tribune, 25 July 2023, https://tinyurl.com/3ze4sf6s (accessed 26 September 2023).