PBC on the Board of Investment’s new Investment Promotion Strategy 2021-2025.

The Pakistan Business Council (PBC) welcomes the Board of Investment’s (BoI) Investment Promotion Strategy 2021-2025, as a well-designed framework. The vision and mission statements articulated in the strategy coincide with PBC’s vision for the economy. The strategy’s focus on prioritizing industrialization, enhancing the export potential, encouraging growth in the knowledge economy, while working towards integrating with global value chains aligns with PBC’s “Make-in- Pakistan” thrust. In addition, BoI’s approach to gauge the impact of investments by the number of jobs created, also aligns with PBC’s vision to create new jobs. PBC’s recommendation to target specific investors as opposed to organizing roadshows is also factored in the strategy.

Alongside foreign direct investments, which appears to be the primary intent of the policy issued by the BoI, PBC would like due importance to be given to domestic investments. Domestic investment form the bulk of the private capital injected into Pakistan’s economy, yet it does not receive the attention it deserves. Furthermore, successful domestic investments serve as a catalyst to attract foreign players. While drafting and implementing its strategy, BoI should ensure quality facilitation services to all investors – local and foreign. After all, it is the Board of Investment, not the Board of Foreign Investment. Furthermore, while a few sectors have been prioritized in the strategy based on a sector scan exercise, BoI should maintain flexibility in attracting investments falling in the non-priority sectors.

PBC recommends that a differentiated approach be applied in the FDI policy to favour value-added exports and import substitution. Agriculture, livestock, poultry, textiles, tourism and fisheries are all sectors that would benefit from additional investment by foreign and local investors. There is very little, if any foreign investment in these sectors, whilst market-seeking FMCG and Telecoms have been the prime beneficiaries of an undifferentiated FDI policy

PBC would like to see improved coordination between the BoI and the provincial Investment Promotion Agencies, to create a one-window solution for providing ease in completing regulatory requirements by the industry. The development and operation of Special Economic Zones is a provincial responsibility and progress has been slow. Besides Regulatory Guillotine is required across the board. Finally, the fiscal policy, which seeks to levy minimum tax based on turnover from the very start of business, irrespective of the actual bottom line, is fundamentally flawed.