ISLAMABAD: The Board of Investment (BoI) is updating the existing investment policy to boost Foreign Direct Investment (FDI) into the country.
According to an official document, the updated policy would focus on identified priority sectors, having investment potential and strong employment and trade benefits.
These sectors include food and beverages, auto and auto-parts manufacturing, IT and IT-enabled services, logistics, textile, tourism and housing, and construction.
The policy would also bring together all provinces and departments to map, simplify, eliminate, and automate the regulatory landscape to reduce the burden on the business.
The establishment of the “Pakistan Business Portal,” an online one-stop-shop, is another important initiative for modernizing the investment climate. At the same time, the government would promote Special Economic Zones for attracting FDI and reviewing the bilateral investment treaties to streamline investment in Pakistan.
According to the document, accommodative fiscal and monetary policy measures and increased public investment that aim to the crowd-in private sector would support higher investment rate in the country.
Moreover, in the post-pandemic scenario, both public and private investments in pandemic-critical sectors, such as health care, medical supplies, pharmaceutical industries, communications, and e-distribution, were also likely to increase.
The State Bank of Pakistan’s (SBP) various measures for digital onboarding of overseas Pakistanis through Roshan Digital accounts, Naya Pakistan certificates, and digital financial services would help increase foreign exchange inflows.
Moreover, low interest rates and an improved business climate would encourage investment.
Numerous measures to improve the ease of doing business are expected to boost capital formation and attract both domestic and foreign investment.
Therefore, with the overall improved macroeconomic conditions, the economy is set to sustain growth momentum during 2021-22, it added.
It is pertinent to mention that the country’s investment-to-GDP ratio declined from 15.3 percent of GDP in 2019-20 to 15.2 percent in 2020-21, owing mainly to lower foreign direct investment (FDI) inflows.
The volume of private sector investment increased by 6.5 percent, whereas its share in GDP decreased. However, in real terms, private investment contracted marginally by 1.3 percent, mainly due to a 68 percent fall in investment related to the electricity & gas distribution sector due to the completion of power projects under the China Pakistan Economic Corridor (CPEC).
Public sector investment inched up to 3.8 percent of GDP in 2020-21 from 3.2 percent last year, while private sector investment declined from 10.6 percent of GDP in 2019-20 to 9.8 percent in 2020-21.