SIFC Requires Safeguards to Bring More Investments into Pakistan: IMF Report

The Special Investment Facilitation Council (SIFC), aimed at attracting and facilitating investment in Pakistan, requires safeguards to bring projects identified through the SIFC under Pakistan’s existing PIMA framework to ensure accountability and transparency, as per a new IMF report. The new IMF report on Pakistan released on Friday adds that this is particularly important given the SIFC’s power to offer regulatory relief and other immunities and the centrality of a level playing field for all investors. Significant progress was made over a short period on the structural reform agenda, though the creation of the SWF and SIFC in August 2023 poses risks to the SOE reform and business environment agendas. However, much more is required in the areas noted to achieve medium-term viability and address Pakistan’s broader structural challenges, including its narrow export base, low private investment, and FDI. Further challenges include a weak revenue base relative to public investment needs, low health and education spending levels in the context of major human capital development needs, elevated poverty levels, and income and gender inequality. The Pakistani authorities committed to the Fund that they will also establish a set of best transparency and accountability practices for SIFC operations, including ensuring that all investments made under SIFC result from the standard Public Investment Management framework.