Sifc- A year in the right direction

Ahmad Ali

08 June 2024

Published in: Daily Times

Pakistan has been in the worst economic crisis of its history, triggered by political turmoil since 2022. This socio-political polarization had brought Pakistani economy on the brink of a default, raising serious concerns about Pakistan’s national security. These unusual circumstances demanded firm resolve, faith, out of the box solutions and innovation. Change of command in Pakistan’s security apparatus brought in COAS General Asim Munir in November 2022. Out of the most logical rationale, that economic security guarantees national security he stepped up and with collaboration of the civil government, introduced Special Investment Facilitation Council (SIFC) in June 2023.

There were two major factors hindering Pakistan’s economic development; discontinuity of economic policies and bureaucratic delays including red-tapism. SIFC was structured as remedy for both of these challenges. All decisions were taken under a speedy mechanism with keeping regular track of implementation of the decisions. One window operation was provided to FDI to ensure ease of doing business. Moreover, SIFC also ensured continuity of economic policies regardless of change in political government, which is a common phenomenon in countries like Pakistan.

SIFC was established to stimulate economic growth and development in Pakistan by attracting investments and fostering a conducive business environment. It was aimed at addressing challenges and capitalizing on opportunities in key sectors such as defense production, agriculture, IT, and energy, aligning with Pakistan’s economic revival goals. All decisions made within SIFC are based on consensus, involving input from federal and provincial ministries, departments, and stakeholders, ensuring inclusivity and broad representation.

The Apex Committee of SIFC, headed by the Prime Minister and comprising representatives from the federal cabinet and provincial chief ministers, approves decisions, ensuring accountability and adherence to due processes. SIFC’s mandate included expediting decision-making processes related to business, investment, and privatization matters while respecting existing government structures and procedures. It focuses on creating a favorable business environment through policy interventions, fostering trust and confidence among investors, and facilitating the implementation of investment-related initiatives.

SIFC has successfully resumed the repatriation of profits by foreign companies, boosting investor confidence and signaling a favorable investment climate. Through strategic partnerships and agreements with countries like Saudi Arabia, UAE, and Kuwait, as well as joint ventures with US-based companies, SIFC has laid the foundation for significant economic dividends in the near future. Notably, SIFC has facilitated the completion of various MOUs and framework agreements, demonstrating tangible progress towards its goal of stimulating economic growth and development in Pakistan.

Sighting future of growth in AI and IT, 200,000 university graduates are receiving IT skills training, empowering them with the knowledge needed to excel in IT services firms, boosting their employability and contributing to the industry’s growth. 10,000 E-Rozgar centers have been established nationwide, providing freelancers with accessible spaces equipped with resources and support to thrive in their careers. Moreover, freelancers can now receive payments conveniently through Paypal, streamlining financial transactions and facilitating their work in the digital economy. Additionally, national policy for high-speed internet fiber is being implemented, ensuring widespread access to fast internet connections, empowering communities with better connectivity for education, work, and communication.

The Pakistan Startup Fund introduced by SIFC, supports and nurtures the startup ecosystem, providing resources and opportunities for aspiring entrepreneurs to turn their ideas into successful ventures. Local production of smartphones is promoted through installment plans, making smartphones more accessible to the general public while supporting the growth of domestic manufacturing.

Most notably recognizing that the future belongs to semiconductor industry due to its importance in electronic devices, SIFC initiated transformative journey to develop a semiconductor industry within the country. Leveraging Pakistan’s skilled workforce, the plan aims to establish the country as a significant player in the global semiconductor industry value chain. Starting with design and expanding into manufacturing and testing, Pakistan aims to become a preferred destination for semiconductor production.

Smuggling and tax evasion drain valuable resources, hindering economic progress. Reports reveal staggering losses, with tax evasion costing approximately Rs. 5.8 trillion annually and illegal trading adding Rs. 1 trillion more to the damage. These practices distort market dynamics and undermine investor confidence. In response to devaluing of Rupee, COAS Gen Asim Munir took a personal interest in the matter. SIFC in partnership with the government, initiated strategic measures to combat smuggling and tax evasion. Deployment of track and trace systems in industries like cement, tobacco, fertilizer, and sugar is a key initiative. Recent achievements of the Federal Board of Revenue (FBR) include surpassing revenue collection targets for the first nine months of FY24 by Rs 3 billion.

All these achievements in the short time spam of a year indicate an achievable bright future of Pakistan and manifest the great potential it beholds. Leaving personal agendas aside, it is high time that the nation and all political parties stand firm behind these initiatives towards prosperity and common goal; betterment of Pakistan.