ISLAMABAD: The Board of Investment (BOI) will launch the ‘Invest Pakistan’ initiative to attract foreign investment in the country, after it’s approved in the Cabinet meeting next week.
According to sources in the BOI, the initiative will be a flagship project of the BOI that specialises in investment realisation, sustainability and bringing the government together for resolve binding constraints in the investment decision.
BOI will register a new public-private partnership company named ‘Invest Pakistan’ in the Securities Exchange Commission of Pakistan (SECP). The company will operate as a joint venture between the government and private sector partners, and will bring together the expertise and resources of both parties to promote investment in the country.
The company will be mandated to work as an investment promotion agency, with the primary objective of creating a more business-friendly environment in the country to encouraging foreign investment.
According to the concept note, Invest Pakistan has the potential to transform Pakistan’s investment landscape. Pakistan has an attractive market size and a growing young middle-class but despite this investment rates continue to remain low as net foreign direct investment for a few years has been either negative or neutral at best. The attractiveness of investment is not going to come by itself or through the promotion of investable assets, attractiveness will have to be created, the note adds.
The low level of FDI and looming macroeconomic crisis both require immediate and medium to long-term fixes.
In the case of Pakistan, while market size and infrastructure are positive factors, political instability, inadequate economic governance, regulatory burden, and accountability have been the sub-optimal factors lowering profitability on investments. Work on these areas is needed to build investors’ interest.
Sources further added that the primary determinant of investment is the risk-adjusted rate of return, “Investors who are convinced of the net returns will invest regardless of all other systematic risks and factors”.
Investment realisation will only happen once the returns are assured with consistency, at least for the medium term.
The initiative is about augmenting the capacity and functions that are either inadequate or non-existent at BOI in the current structure. As these new functions gain strength and show results, they will help reform the overall organisation to a more goal and outcome-oriented one.
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