Pakistan eyes investment led growth after $3 billion Eurobond issuance

The government has approved Karachi Industrial Park as a federal Special Economic Zone and cleared two other major measures

Islamabad: The government has approved Karachi Industrial Park as a federal Special Economic Zone and cleared two other major measures to encourage industrial investment, improve facilities for businesses and support export growth, as Finance Minister Muhammad Aurangzeb stressed the need to turn economic stability into jobs and long term development.

The decisions were taken at the 11th meeting of the Board of Approvals for Special Economic Zones, chaired by the finance minister. The board approved Karachi Industrial Park as a Federal Special Economic Zone to attract industries focused on exports, bring in modern technology, increase the value of locally produced goods and create jobs.

The board also approved rules for providing roads, utilities and other basic facilities up to the designated starting point of privately established special economic zones through government funding. Under the approved criteria, requests for these facilities will be considered on a case by case basis under the Special Economic Zones Act, 2012.

A third decision approved a new land lease policy for public sector special economic zones and industrial estates in Punjab. The policy aims to encourage investment by allowing long term leases, reducing the large upfront cost of acquiring industrial land and making better use of land owned by the public sector. It also seeks to attract investment in important industries and new sectors with strong export potential.

The board confirmed the minutes of its 10th meeting before considering the three main agenda items.

The meeting was attended by Federal Minister for Board of Investment Qaiser Ahmed Sheikh, Planning Minister Ahsan Iqbal, Commerce Minister Jam Kamal Khan, Adviser to the Prime Minister on Industries and Production Haroon Akhtar Khan, and Punjab Industries Minister Shafay Hussain. Senior officials from the Finance Division, Board of Investment, Special Investment Facilitation Council, federal and provincial special economic zone authorities, relevant ministries and provincial departments also attended.

In a separate meeting with senior World Bank and International Finance Corporation officials, Aurangzeb said Pakistan wanted to make economic stability lasting and use it to support investment, exports and private sector growth.

World Bank Regional Practice Director Sandeep Mahajan congratulated Pakistan on restoring economic stability and praised the government’s handling of the recent crisis caused by regional conflict. He said the country’s stronger financial position and timely response had helped it face pressure from outside.

Mahajan was accompanied by World Bank Country Director Bolormaa Amgaabazar and International Finance Corporation Division Director Simon Andrews.

Aurangzeb said Pakistan had regained access to international capital markets through a recent $3 billion Eurobond issue with five year and 10 year maturities. He said the government wanted to build on this progress, improve investor confidence and create a path towards further upgrades in Pakistan’s credit rating.

The discussions also covered continued economic reforms, careful management of government finances, risks linked to foreign payments and the need for stable policies. The finance minister said businesses needed clear and predictable rules before making long term investments.

The government and World Bank representatives also discussed privatisation, stronger rules for businesses and clear plans for managing companies after privatisation. They exchanged views on ways to finance infrastructure projects through cooperation with development partners and greater private sector participation.

Aurangzeb separately met outgoing National Disaster Management Authority Chairman Lieutenant General Inam Haider Malik and incoming chairman Lieutenant General Hasan Khattak to discuss climate risks, disaster preparedness and ways to protect communities from extreme weather.

The finance minister described climate change and population growth as two major challenges for Pakistan because they affect economic stability, food supplies, communities and public spending. He said climate change and its impact on Pakistan had also been discussed with international partners during the recent annual meetings of the International Monetary Fund and World Bank.

Inam Haider Malik briefed the minister on Pakistan’s long range climate forecasting system, which can provide outlooks up to 12 months ahead, and efforts to improve it. Aurangzeb stressed that forecasts must lead to timely decisions and early warnings. He also called for long range forecasts to be combined with shorter term monitoring by the Pakistan Meteorological Department and other agencies so vulnerable communities could receive warnings in time.

The NDMA leadership also discussed the Global Resilience Hub and the Next Generation Technologies initiative. These efforts aim to move Pakistan from mainly responding after disasters to using technology, information and early action to reduce risks before they cause damage.

The meeting stressed the need to train more Pakistani experts in climate science, retain skilled staff and clearly assign responsibility to relevant institutions. Aurangzeb also called for domestic resources and international support to be used for practical projects that improve disaster readiness and climate resilience.

He thanked Inam Haider Malik for his work as NDMA chairman and wished Hasan Khattak success in his new role.