Special Investment Facilitation Council

Special Investment Facilitation Council
TypeGovernmental
PurposeTo attract foreign investment and boost the country's economy
Location
Membership
All Provincial Chief Ministers and the Army Chief
Chair
Shehbaz Sharif
Websitewww.sifc.gov.pk

The Special Investment Facilitation Council (SIFC) is a Federal government body and Investment Promotion Agency 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 increasing Foreign 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

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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

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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] The SIFC operates under the IMF's Public Investment Management Assessment (PIMA), with the fund stating this as "particularly important given the SIFC’s power to offer regulatory relief and other immunities and the centrality of a level playing field for all investors."[9] In June 2024 Shehbaz Sharif established a Cabinet Committee to "oversee" the SIFC.[10]

Policies and Programs

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On 14 December 2023 the SIFC approved "business and investment-friendly SIFC visa."[11] In October SIFC ordered the Petroleum Division to "prepare ‘Merit Order’ for supply of gas" to various sectors, proposals for a "cost-of-service" industrial tariff and a Weighted Average Cost of Gas (WACOG).[12] Business Recorder also reported that SIFC 'cleared' a request of the All Pakistan Textile Mills Association to reduce industrial power tariffs to 9/kWh per cent.[13] SIFC's apex committee in January 2024 ordered the Federal Board of Revenue to conduct an audit of urea/fertilizer companies and sellers "against the quantity of urea sold/ distributed to farmers."[14] The special investment council has expressed support for the army-backed crackdown on smuggling and hoarding.[15] According to Shehbaz Sharif, then-recent investments from the United Arab Emirates and Saudi Arabia were to be conducted under SIFC.[16] A "push" in March from the investment council led to the Ministry of Information Technology and Telecommunication "... working on a plan to develop an IC design cluster in Pakistan through training of students and young professionals,”[17] while it was "set to implement a plan for developing a semiconductor and chip design industry" in Pakistan.[18] According to Mettis Global, SIFC will establish "ten thousand E-Rozgaar centers" for freelancers.[19]

Structure

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Special Investment Facilitation Council (SIFC) Structure

Apex Committee

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 Ref
Office/Portfolio Office-Holder Status Emblem Branch
Prime Minister Shehbaz Sharif Chairman Centre/Federal [20][21]
Federal Minister for PD&SI Ahsan Iqbal Member Centre/Federal
Federal Minister of Finance Muhammad Aurangzeb Member Centre/Federal
Federal Minister of IT & Telecom Shaza Fatima Khawaja Member Centre/Federal
Federal Minister of NFS&R Rana Tanveer Hussain Member Centre/Federal
Federal Minister of Industries & Production Member Centre/Federal
Federal Minister of Energy Awais Leghari Member Centre/Federal
Federal Minister of Water Resources Musadik Malik Member Centre/Federal
Federal Minister of Defense Khawaja Asif Member Centre/Federal
Federal Minister of Defence Production Member Centre/Federal
Federal Minister for Board of Investment Aleem Khan Member Centre/Federal
Chief of the Army Staff Gen. Asim Munir Member Pakistan Army
Chief Minister of Balochistan Sarfraz Bugti Member Provincial Govt
Chief Minister of Sindh Murad Ali Shah Member Provincial Govt
Chief Minister of Khyber Pakhtunkhwa Ali Amin Gandapur Member Provincial Govt
Chief Minister of Punjab Maryam Nawaz Member Provincial Govt
National Coordinator Lt Gen. Sarfaraz Ahmad Member Pakistan Army
Special Assistant to the Prime Minister Dr. Jahanzeb Khan Secretary Centre/Federal

Executive Committee

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Federal Minister for PD&SI Ahsan Iqbal Chairman Centre/Federal
National Coordinator Lt Gen. Sarfaraz Ahmad Member Pakistan Army
Special Assistant to the Prime Minister Dr. Jahanzeb Khan Member Centre/Federal
Director General SIFC (DG-SIFC) Major Gen. Tabassum Habib Member Pakistan Army
Secretary, Board of Investment Rahim Hayat Qureshi Secretary Centre/Federal
Secretary, Ministry of Foreign Affairs Amna Baloch Member Centre/Federal
Federal Ministers[a] Multiple Members Centre/Federal
Provincial Ministers[b] Multiple Members
Provincial Govt
All Provincial Chief Secretaries Multiple Members
Provincial Govt

Implementation Committee

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Special Assistant to the Prime Minister Dr. Jahanzeb Khan Chairman Centre/Federal
Director General SIFC (DG-SIFC) Major Gen. Tabassum Habib Member Pakistan Army
Secretary SIFC Secretariat Jamil Ahmad Qureshi Member Centre/Federal
Secretary, Ministry of Foreign Affairs Amna Baloch Member Centre/Federal
Other and Co-Opted Members (in the Implementation Committee)
● Representative of Pakistan Army

● Five (5) Sector Coordinators

● Five (5) Co-coordinators ex-Pakistan Army

● Finance Secretary (Imdad Ullah Bosal)

● Board of Investment Secretary (Rahim Hayat Qureshi)

● Economic Affairs Division Secretary (Kazim Niaz)

● Chairman of the FBR (Rashid Langrial)

● Deputy Governor State Bank of Pakistan (nominated by SBP governor)

● 'Provincial Focal Persons'

Performance

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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,[22] 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.[23] Increased investment in government securities leading to "positive sentiments" at the PSX after Treasury Bills reached a four-year high in March 2024.[24] 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.[25] 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.[26][27] The same month FDI increased by 17% to $1.9 billion, primarily sourced from China, Hong Kong, the UK, US and Singapore.[28] 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.[29]

In October, Bloomberg reported that Pakistan's local government bonds in 2024 earned $875 million in overseas inflows, among the highest returns in Asia. This after four-years of outflows adding up to $1.4 billion. Pakistan's stock index increased by 73%, "making it the world’s best performer", while dollar-bonds also yielded 40%. These increases attributed to IMF-backed foreign reserve tranches, "stable currency", and cooling inflation rates.[30] In First Quarter FY25, FDI grew by 48%, although foreign inflows from Gulf investors "remained negligible."[31]

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.[32] 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."[33] SIFC has also been criticized for being a "rehashed" Board of Investment, short-term policy formulation and continuing issues in other sectors.[34]

See Also

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Notes

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  1. ^ Federal Ministers of; (i) Defence, (ii) NFS&R, (iii) IT & Telecom and (iv) Power. Ministers of State of; (i) Petroleum, (ii) Finance
  2. ^ Provincial Ministers of; (i) Agriculture, (ii) Mines and Minerals, (iii) IT, (iv) Energy, (v) Board of Revenue, (vi) Irrigation, (vii) Finance, (viii) Planning and Development and (ix) Investment

References

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  1. ^ "Establishes the Special Investment Facilitation Council (SIFC)". unctad.org. UN Trade and Development. 20 June 2023.
  2. ^ a b "PM assigns special council $5b foreign investment task". Nation.com.pk. 22 June 2023. Retrieved 2023-09-02.
  3. ^ "Briefing session for resident Diplomatic Missions held at Foreign Office, Islamabad". www.radio.gov.pk.
  4. ^ "New 'investment facilitation' council gives Pakistan army formal seat at economic table". Arab News PK. June 21, 2023.
  5. ^ 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).
  6. ^ Siddiqui, Salman (2024-05-14). "External investment surges by 84%". The Express Tribune. Retrieved 2024-09-13.
  7. ^ "The Special Investment Facilitation Council's Role in Pakistan's Economic Resurgence". thediplomat.com.
  8. ^ Raza, Syed Irfan (August 8, 2023). "Special Investment Facilitation Council approves key projects to attract investment". DAWN.COM.
  9. ^ Amin, Tahir (2024-05-11). "SIFC requires safeguards to bring projects under PIMA framework: IMF". Brecorder. Retrieved 2024-10-16.
  10. ^ "Govt establishes cabinet committee to oversee implementation of SIFC recommendations". Brecorder. 2024-06-06. Retrieved 2024-10-16.
  11. ^ "SIFC approves business, investment-friendly visa facility". Brecorder. 2023-12-14. Retrieved 2024-10-16.
  12. ^ Ghumman, Mushtaq (2023-10-13). "SIFC body seeks 'Merit Order' for gas supply". Brecorder. Retrieved 2024-10-16.
  13. ^ Report, Recorder (2024-01-23). "SIFC clears proposal: APTMA urges govt to expedite power tariff cut process". Brecorder. Retrieved 2024-10-16.
  14. ^ "SCO joint communique: member states say important to counter protectionist policies, sanctions". Brecorder. 2024-10-16. Retrieved 2024-10-16.
  15. ^ Abbasi, Zaheer (2024-01-04). "SIFC set to take on smugglers, hoarders". Brecorder. Retrieved 2024-10-16.
  16. ^ "UAE, KSA investments to come through SIFC, says PM Shehbaz". Brecorder. 2024-05-25. Retrieved 2024-10-16.
  17. ^ "Pakistan plans to develop 'chip design cluster' to enter global semiconductor industry". Arab News. 2024-03-30. Retrieved 2024-10-16.
  18. ^ "SIFC to implement plan to develop semiconductor, chip design industry". Profit by Pakistan Today. 2024-03-28. Retrieved 2024-10-16.
  19. ^ "SIFC promotes IT investment, investor confidence". Mettis Global Link. 2024-06-12. Retrieved 2024-10-16.
  20. ^ "Three-tier structure of Special Investment Facilitation Council outlined". Profit by Pakistan Today. 2023-10-02. Retrieved 2024-10-16.
  21. ^ "No.7(218)-HR/2023: Special Investment Facilitation Council (SIFC)". Board of Investment (Pakistan).
  22. ^ Siddiqui, Salman (2024-03-21). "FDI recovers to $131 million in Feb". The Express Tribune. Retrieved 2024-09-13.
  23. ^ Siddiqui, Salman (2024-02-27). "Bank financing hits record high". The Express Tribune. Retrieved 2024-09-13.
  24. ^ "Pakistan's stock market records highest closing as inflation eases, investment in securities increases". Arab News PK. 2024-04-03. Retrieved 2024-09-13.
  25. ^ Siddiqui, Salman (2024-05-14). "External investment surges by 84%". The Express Tribune. Retrieved 2024-09-13.
  26. ^ Iqbal, Shahid (2024-07-02). "T-bills see highest inflows in four years". DAWN.COM. Retrieved 2024-09-13.
  27. ^ Siddiqui, Salman (2024-07-21). "Global investors inject record $581m into T-bills". The Express Tribune. Retrieved 2024-09-13.
  28. ^ Reporter, The Newspaper's Staff (2024-07-20). "FDI jumps 17pc to $1.9bn". DAWN.COM. Retrieved 2024-09-13.
  29. ^ Shaikh, Anmol (2024-08-04). "SIFC initiatives fuel massive surge in Pakistan's exports". The Express Tribune. Retrieved 2024-08-18.
  30. ^ "Funds Tread Back to Pakistan Local Bonds as Economy Stabilizes". Bloomberg.com. 2024-10-15. Retrieved 2024-10-16.
  31. ^ Reporter, The Newspaper's Staff (2024-10-22). "FDI jumps 48pc with lion's share from China". DAWN.COM. Retrieved 2024-10-23.
  32. ^ Rana, Shahbaz (23 May 2024). "Investment plummets to 50-year low". The Express Tribune. Retrieved 26 May 2024.
  33. ^ Ahmad, Dr Khalil (2024-04-29). "Rethinking Pakistan's FDI obsession". The Express Tribune. Retrieved 2024-09-13.
  34. ^ Research, B. R. (2023-11-27). "FDI and SIFC". Brecorder. Retrieved 2024-10-16.
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