SIFC formation: unlocking FDI for tech sector
“This is the era in which almost every institution will gravitate towards fintech. We can take the examples of Facebook, TikTok, FoodPanda or Careem, all of which now have their own wallets,” says Syed Nadeem Hussain, Chairman PFN. photo: file
Pakistan has recently seen a welcome development vis-a-vis rapidly attracting, materialising and retaining foreign direct investment (FDI) through the formation of Special Investment Facilitation Council (SIFC) under a high-powered, holistic and inclusive leadership structure of top civilian and military offices, with a lot of muscle, clarity and decision-making prowess.
All through its economic history, Pakistan has been marred by an inefficient, bureaucratic and discourteous system of setting up new businesses – be it securing investments, establishing industry collaborations, licensing procedures, adopting legal frameworks for new technologies, regulatory environment, granting financial, land or labour-related NOCs and repatriation of profits.
Though it is the prerogative of any country to regulate its economy, it needs to be competitive regionally and internationally in terms of cost and ease of doing business benchmarks.
In the peculiar case of Pakistan, there has never been any dearth of policies, HR competencies or intrinsic potentialities of the land or its economy but the systemic flaws that put us through a very low and below par trajectory of investments into the economy, and, to top it all, lack of streamlined, one-window and time-sensitive processes and procedures have played the role of the principal spoilsport.
In fact, throughout the last decade, Pakistan could never receive FDI above 1% of its gross domestic product (GDP).
To further decipher the international investment landscape, it has to be understood that any new investments the entrepreneurs or business groups will be making anywhere in the world, would be primarily in the new and emerging technologies or relocation of labour-intensive industries from advanced to developing economies – and, for emerging technologies, information and communication technologies (ICTs), software and app development, artificial intelligence (AI) and machine learning, automation and robotics, blockchain technologies, virtual and augmented reality, space sciences and allied industries, bio and nano-technologies and business process re-engineering (BPR) will take the upwards of 80% of all investments throughout the globe.
Therefore, with a population of 249.5 million and a silver lining of 64% young populace, Pakistan is one of the most well-placed tech destinations for the world – without an iota of doubt, provided we offer them with a one-window, one-roof facilitative, incentivising and encouraging mechanism to set up their businesses, which is exactly the core promise of SIFC.
Along the lines, all we need to do is to enable various verticals of information technology and IT-enabled services’ ecosystem in the country through massive skill development programmes, tax holiday for a decade and supportive regulatory institutions.
The more investment the IT industry attracts through SIFC, the more rapid will be export growth, bridging of trade deficit and strengthening of foreign exchange reserves. That’s why SIFC is an instant hit among the tech fraternity of Pakistan.
The writer is an MPhil scholar with a keen interest in economy-related subjects. She can be accessed at Rafeyazahid40@gmail.com
Published in The Express Tribune, July 17th, 2023.
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