PRIME MINISTER Shehbaz Sharif appears to be pushing the rusty bureaucratic machinery hard to turn nearly three dozen MoUs, signed with Chinese companies during his recent visit to Shenzhen, into real agreements and investments. Chairing a meeting to discuss Board of Investment matters, Mr Sharif said that promoting local as well as foreign investment in Pakistan was a priority. His claim that a business-friendly environment was being cultivated to facilitate the relocation of Chinese industries to Pakistan, through joint ventures, will, however, soon be tested since the nation’s bureaucracy is notorious for stalling, and is seen by foreign firms as a major barrier to direct investment. Some of the policy steps being pushed by the government to allay the concerns of Chinese investors include legislation to create a one-stop shop for attracting investments in the Special Economic Zones and the establishment of a business facilitation centre in Islamabad to remove investors’ doubts.
That said, it is Pakistan’s internal security challenges that will continue to dictate the investment decisions of Chinese companies, notwithstanding better business policies. Safety of their workers in Pakistan was perhaps the most critical issue raised by Chinese investors during their meetings with Mr Sharif. This concern was more forcefully raised by a senior minister of China’s Communist Party recently; while addressing the representatives of Pakistan’s political parties in Islamabad, he identified internal security defects as a major factor responsible for the erosion of investor confidence. While the safety of its workers has always been a matter of concern for Beijing, the recent targeted attacks, especially the one in Bisham, near the project site of the Dasu dam, on its engineers has significantly dented China’s confidence in our ability to protect its interests from militant groups. Security conditions will have to be improved in tandem with the business environment to make Pakistan a destination of choice for Chinese investors.
Published in Dawn, June 28th, 2024
