INP-WealthPk

Pakistan Encourages UK Investors to Invest in SEZs

March 24, 2022

By Hamid Mahmood ISLAMABAD, March 24 (INP-WealthPK): Pakistan provides great potential for international investment in special economic zones (SEZs) under the China-Pakistan Economic Corridor (CPEC) and a variety of other areas of the economy. Keeping in view this potential, Pakistan has invited the attention of British businessmen to look into the possibilities of joint venture and investment opportunities in Pakistan. President of the Islamabad Chamber of Commerce and Industry (ICCI) Muhammad Shakeel Munir recently met with Lord Mayor of Birmingham Councillor Muhammad Afzaal and stated that the UK companies have a tremendous opportunity to invest in the SEZs of CPEC. He added that CPEC has started its second phase and is available for international investment. It would provide investors with attractive incentives and facilities, converting Pakistan into a more viable market for investment. The United Kingdom has long placed a premium on its connections with Pakistan, and there is significant scope for expanding bilateral trade and collaboration in the areas of telecommunications, information technology, agriculture, pharmaceuticals, and higher education. Since the previous decade, trade volume has favoured Pakistan, according to WealthPK analysis. The trade volume between Pakistan and the United Kingdom was $2.39 billion in 2019. Due to global trade limitations, trade volume declined in 2020, reaching $2.35 billion. Pakistan exported $2.10 billion worth of products to the UK in 2021, while importing $0.76 billion products, for a total trade volume of $2.87 billion. In a single year, it increased by $0.52 billion (or 22.12%). House linens, non-knit men's suits, and knit sweaters were the primary items Pakistan exported to the UK. The graph shows the difference in commerce between the two nations. [caption id="attachment_65234" align="aligncenter" width="696"] Source: UN Comtrade Dataset/ WealthPK research[/caption] To enhance the trade globally, Pakistan hosted a conference of Pakistani Overseas Investors in Islamabad on March 13-15, 2022, to encourage them to invest in Pakistan. The conference attracted investors from the UK and around the world who expressed interest in investing in Pakistan. UK investors told WealthPK that Pakistan has taken significant steps for investors in terms of investor policy and One-Stop Services (OSS) for international investors. They pointed out that Birmingham has a Pakistani community of over 300,000 people who want to help in enhancing Pakistan-UK commercial connections. Without a doubt, the OSS minimises the time and uncertainty involved in obtaining registrations, permits, licenses, and approvals from different government authorities, as well as the supply of public goods. A successful SEZ necessitates a policy framework that facilitates collaboration between all relevant ministries, departments, and agencies at all levels of government. All nations and international organizations that support the BRI and CPEC, conduct mutually beneficial cooperation, and seek common development are invited to join in the development of CPEC on the basis of consensus, so that the advantages of development may be shared. The SEZs provide a variety of tax and duty exemptions, and competition among zones usually causes these incentives to be more generous than necessary to attract investment, hence raising the fiscal burden. As a result, investment promotion agencies must carefully calibrate incentive packages and implement sunset provisions in order to increase the net advantages from SEZ construction. Exposures to global production and market systems might help to assure optimal private sector engagement for extra resources and skills to overcome investment limits and jump-start competitiveness. Finally, the SEZs in Pakistan should have well-defined objectives, goals, targets, and benchmarks, like contributions to GDP growth, exports, employment, revenue, and foreign direct investment. Governments should carefully pick techniques and spend resources wisely, evaluate success against specific criteria, and be prepared to remove funding from zones that do not meet the requirements.