Pakistan has made strides in attracting foreign investment through high-level MOUs with global partners. In 2023, the Special Investment Facilitation Council (SIFC) was established to streamline investment processes and boost economic growth.

In recent years, successive governments in Pakistan have made significant efforts to attract foreign investment. From 2018 to 2019, Pakistan hosted high-level delegations from countries such as Saudi Arabia, China, Turkiye, Malaysia, the United Arab Emirates (UAE), and Qatar. These visits resulted in the signing of multiple memorandums of understanding (MOUs) and agreements worth billions of dollars, targeting sectors including petrochemicals, agriculture, infrastructure development, tourism, renewable energy, and others.
Saudi Arabia, for instance, agreed to invest USD 20 billion in various projects, including a USD 10 billion oil refinery and petrochemical complex in Gwadar. China pledged to enhance cooperation under the China-Pakistan Economic Corridor (CPEC), supporting Pakistan’s industrialization and social-sector development. Turkiye expressed its interest in Pakistan’s automobile and tourism sectors, while Malaysia signed five MOUs to expand bilateral trade and investment in areas such as telecommunications, technology, and halal food.
Additionally, the UAE announced a USD 6.2 billion package, including USD 3 billion in balance of payments support and USD 3.2 billion in deferred oil payments. Qatar also pledged to invest USD 3 billion in various sectors and to increase its liquefied natural gas (LNG) exports to Pakistan. However, despite high-level support, most of the above MOUs failed to materialize. Experts attribute this failure to weak follow-up, bureaucratic hurdles, procedural delays, jurisdictional conflicts between federal and provincial governments, legal disputes, and lack of coordination among different government agencies and ministries.
For example, the Saudi oil refinery project in Gwadar faced numerous challenges, including security issues, land acquisition problems, environmental concerns, and feasibility studies. CPEC projects also experienced slowdowns due to disagreements over financing terms, delays in payments to Independent Power Producers (IPPs), tax exemptions, and security issues. The lack of a clear policy framework and incentives for new entrants hampered Turkish investment in the automobile sector. Malaysian investment in telecommunications was stalled by regulatory hurdles and legal disputes faced by existing Malaysian companies in Pakistan. The UAE’s support package was partially delivered, with only USD 2 billion out of USD 3 billion disbursed for balance of payments support, while the deferred oil payments facility was suspended after eight months due to falling oil prices. Qatari investments were delayed by the COVID-19 pandemic and changing regional dynamics.
Another factor deterring investment is the lack of synergy between economic and strategic priorities. For instance, Saudi Arabia asked Pakistan to repay USD 1 billion of the USD 3 billion loan it had previously provided. China paused some projects due to security concerns, while the UAE had reservations about Pakistan’s stance on regional issues. Instability in Pakistan further exacerbated these issues, leading to a ‘wait and see’ approach to the rollover of deposits in the State Bank of Pakistan from bilateral partners in 2021-22; this, in turn, stalled Pakistan’s International Monetary Fund (IMF) program.

The SIFC has the mandate to recommend regulatory relaxations or exemptions, provided they align with existing legal frameworks. This flexibility aims to make Pakistan more attractive to potential investors, particularly those from the Gulf Cooperation Council (GCC) countries.

In response to these challenges, the government of Pakistan established the Special Investment Facilitation Council (SIFC) in June 2023. Spearheaded by the Prime Minister, the SIFC comprises federal and provincial ministers, secretaries, and high-level representatives from the armed forces. Its primary mandate is to attract foreign investments by streamlining processes and addressing the bureaucratic and regulatory challenges that have historically hindered economic growth. The SIFC aims to be a “single window” for investors, designed to circumvent traditionally cumbersome and lengthy business processes. This interface simplifies and expedites investment procedures, reducing bureaucratic red tape.
The hallmark of the SIFC is its inclusive framework, bringing together key state institutions, federal and provincial governments, and various ministries. This integrated approach fosters a conducive environment for business growth and investment. Regular meetings of the apex and executive committees ensure consistent follow-up on issues. In these meetings, bottlenecks are promptly identified in the presence of top decision-makers from relevant ministries and departments. Solutions are devised on the spot, with follow-up actions tracked in subsequent meetings. The presence of all chief ministers and the Prime Minister further enhances federal-provincial coordination and collaboration.
The SIFC is facilitating several notable projects in key sectors such as agriculture, livestock, mining, minerals, IT, and energy. The council actively explores and markets investment opportunities, aiming to attract substantial Foreign Direct Investment (FDI) from friendly nations. It ensures timely decision-making and approvals, fostering a more efficient investment environment. The SIFC has the mandate to recommend regulatory relaxations or exemptions, provided they align with existing legal frameworks. This flexibility aims to make Pakistan more attractive to potential investors, particularly those from the Gulf Cooperation Council (GCC) countries. This strategic focus is part of a broader effort to enhance economic ties and foster regional cooperation through economic diplomacy.
Some of the projects that the SIFC is facilitating include mining operations at Reko Diq in Balochistan’s Chagai district and Sindh’s Thar region; modernizing agriculture through AI-driven irrigation and wireless sensor networks; wind, solar, and hydroelectric energy generation, including the Diamer-Bhasha Dam; development of IT infrastructure in major cities to establish technology parks and IT facilities; development of metro and bus rapid transit systems to improve urban mobility; the Thar Coal Rail connectivity scheme to improve coal transportation from the Thar region to power plants and other industries; and a USD 10 billion refinery by Saudi Aramco to enhance Pakistan’s refining capacity and reduce reliance on imported petroleum products. Many more initiatives are in the pipeline, with ballpark numbers announced during recent high-level meetings between Pakistani leadership and Saudi Arabia and the UAE.
However, the SIFC has faced criticism. Key among these are the exclusion of local businesses and duplication of efforts vis-à-vis existing institutions, such as the Board of Investment. Critics argue that the SIFC’s focus on foreign investment neglects the potential of domestic investors and fails to address systemic issues deterring both local and foreign investments. 
One must understand the context to objectively assess the validity of these criticisms. The National Security Policy of Pakistan (NSP 2022-26) highlights economic security as a central pillar of national security, recognizing that the country’s traditional security and human security are essentially linked to its economic stability and growth. The NSP considers economic instability a nontraditional security concern, necessitating a collaborative approach between civil and military leadership to ensure economic revival.

The Sustainable Development Policy Institute (SDPI) has long proposed an Economic Security Council, similar to the National Security Council, comprising civil (both the leaders of the house and opposition) and military leadership to address Pakistan’s economic challenges. This proposal emphasized creating a five-year economic roadmap, ensuring policy continuity, and tackling key economic issues. Although the leader of the opposition is not a member of the SIFC, this forum is quite close to the national economic security council. The creation of the SIFC has the potential to forge consensus on strategies against economic challenges.
The representation of armed forces in the SIFC also emerged from a broader context of geopolitical considerations and the necessity to instill investor confidence. In the past, many friendly countries have insisted on assurances and guarantees for their economic initiatives from the Army Chief, revealing their concerns about the lack of policy consistency. 
Regarding concerns about the neglect of domestic investors, it is essential to evaluate this argument in light of the SIFC's positive impact on stabilizing the rupee's value against major currencies since September 2023. Without timely intervention from the SIFC, hoarders and smugglers of dollars could have exacerbated economic instability. Moreover, the SIFC has been instrumental in ensuring Pakistan met its commitments to the IMF, facilitating the successful conclusion of the last standby agreement (SBA), which was essential for Pakistan’s macroeconomic recovery. 
To provide further evidence of the positive impact of civil-military collaborative frameworks, one can look at the success of the National Command and Operation Centre (NCOC) during the COVID-19 pandemic. The NCOC, jointly steered by civil and military leadership, managed to control the spread of the virus more effectively than many other countries in the region. It coordinated resources, implemented health measures, and ensured a unified response, which was critical in mitigating the pandemic’s impact on Pakistan’s economy and public health. Similarly, Pakistan’s graduation from the grey list of the Financial Action Task Force (FATF) was facilitated by a civil-military coordination mechanism. A FATF core cell at the General Headquarters (GHQ) ensured compliance with one of the toughest action plans laid out by FATF and the Asia Pacific Group, highlighting how a unified approach can lead to significant achievements.
These examples demonstrate the potential success of the SIFC if it can leverage the strengths of both civilian and military institutions to overcome economic challenges and foster a conducive investment climate. The establishment of the SIFC is a pragmatic initiative to stimulate economic growth in Pakistan. However, its success depends on effective functioning and implementation. The SIFC alone cannot address all of Pakistan's economic challenges; it must be part of a broader strategy involving comprehensive dialogue and consensus on the necessary economic reforms for sustainable and inclusive development. Ensuring a balanced and collaborative approach is crucial for the SIFC to transform Pakistan's economic landscape and achieve long-term prosperity. Integrating local businesses and addressing systemic investment barriers are key, as is harmonizing the SIFC's role with existing institutions like the Board of Investment, the Economic Coordination Committee, and the National Economic Council to maintain an equilibrium among these institutions, ensuring the SIFC complements rather than overshadows these bodies.
Consistency in policy and a stable investment climate are important for attracting and retaining foreign investors. The lack of consistency has been a significant hurdle for Pakistan, as seen in the instances where geopolitical considerations and domestic political instability led to strained relations with key investment partners like Saudi Arabia, China, and the UAE. These countries, essential for Pakistan’s economic strategy, have at times reduced or withdrawn their financial commitments due to perceived uncertainties in Pakistan's policy landscape.
To build investor confidence, Pakistan needs to demonstrate a commitment to policy consistency and effective implementation. This requires a stable environment where policies remain predictable and reliable, even amidst leadership changes. The SIFC plays a crucial role in achieving this stability by acting as a central body that ensures continuity and coherence in economic policies.
The NSP’s emphasis on economic security as a pillar of national security highlights the integrated approach required to tackle Pakistan's economic challenges. Economic stability directly impacts traditional security concerns, as a robust economy is better equipped to address issues related to human security, infrastructure development, and social welfare. By incorporating economic stability into the broader security framework, Pakistan acknowledges that sustainable development and security are interdependent.
The SIFC's role in this integrated approach is to ensure that economic policies are aligned with national security objectives. By doing so, the SIFC can help create a stable environment that attracts foreign investments, drives economic growth, and enhances overall national security. This holistic approach is crucial for addressing the multifaceted challenges facing Pakistan today.
For the SIFC to be truly successful, it must also focus on fostering inclusive growth. Addressing systemic issues such as bureaucratic inefficiencies, corruption, and regulatory hurdles is essential for creating a more inclusive and equitable economic environment.
One way to achieve this is by enhancing transparency and accountability in the investment process. Implementing robust monitoring and evaluation mechanisms can help ensure that projects are completed on time and within budget, and that the intended benefits are realized. Additionally, fostering a culture of continuous improvement and learning from past experiences can help address systemic issues more effectively.
Strengthening regional and international partnerships is another critical aspect of the SIFC's strategy. Through economic diplomacy, Pakistan can create a more interconnected and resilient economy. This includes not only attracting investments but also engaging in trade agreements, joint ventures, and collaborative projects that enhance regional economic integration.
As Pakistan is addressing its economic challenges, the SIFC can play a crucial role in shaping a more stable, resilient, and prosperous future. By fostering a collaborative approach and ensuring that economic policies are aligned with national security objectives and vice versa, the SIFC can help unlock Pakistan's full potential and pave the way for sustainable development.

The author is the head of Pakistan’s premier policy think tank, Sustainable Development Policy Institute.
X: @abidsuleri