Long-Lasting Solutions
Long-Lasting Solutions: Pakistan faces a serious investment problem. Its investment-to-GDP ratio is only 13.1pc. Other regional countries invest more than 30pc. Pakistan cannot fix this by taking small steps. It also cannot fix it by giving special benefits to a few powerful investors. Investment will not rise if the system stays unequal. The government keeps offering special rules to some groups while others struggle. The Special Investment Facilitation Council (SIFC) shows this clearly. The SIFC was created more than two years ago to attract foreign investment. It has the power to bypass rules. However, it has delivered far less than expected. Policymakers still continue with the same approach. At a recent Pakistan Business Council meeting, the SIFC’s national coordinator spoke about a “strategic shift.” But for now, that shift only means admitting that foreign investors will come only if local investors join in.
Need Deep Reforms
The SIFC promised full support to major local business groups. But it still avoids the deep reforms needed to improve the overall investment climate. Pakistan’s weak investment performance harms its future. The country has strong potential but cannot grow without investment. Low investment reduces productivity. It increases dependence on imports. In Pakistan’s case, it also triggers repeated balance-of-payment crises. The economy has become more stable under the IMF programme. But growth will not take off until policymakers stop relying on short-term fixes. They must commit to long-term, serious reforms to raise investment to regional levels.
Selective Incentives Fail
Pakistan’s private and public investment levels have fallen for many years. Other regional countries steadily increased their investment in infrastructure and productivity. Pakistan did not do this. Successive governments focused on short bursts of consumption-led growth. They ignored deeper problems that block investment. Even Sri Lanka now has a much higher investment-to-GDP ratio of around 23pc. No country can attract steady investment by giving selective incentives.
Companies Leaving Pakistan
These incentives cannot fix an unfair system marked by inconsistent policies, heavy bureaucracy, unclear rules, unequal taxes, weak institutions, and unpredictable regulations. Many multinational companies recently left Pakistan. They did not leave due to a lack of opportunities. They left because policy and regulatory obstacles made operations too difficult. Unless the government reforms the entire investment system and gives every investor a fair chance to succeed, this trend will continue.
Published in Dawn, 29th November 2025
