Sovereign Wealth Fund launched

Dar announces strategic move to boost mining, agriculture, and IT sectors

ISLAMABAD:

Highlighting the significance of the mining sector as a key driver of the economy, Senator Mohammad Ishaq Dar, the Federal Minister for Finance and Revenue, announced on Tuesday the establishment of the Pakistan Sovereign Wealth Fund. This fund aims to harness the potential of mining, agriculture, and information technology, which are believed to be the future growth engines for the country.

Speaking at the Pakistan Minerals Summit themed “Dust to Development: Investment Opportunities in Pakistan,” the finance minister emphasised that these sectors would remain the primary focus for the country’s growth, irrespective of the ruling government. He assured investors that the government was taking serious measures to facilitate their initiatives and maximise the country’s resource potential.

The draft legislation for setting up the Sovereign Wealth Fund, adhering to global standards, has been presented in the national assembly and is scheduled to be moved to the Senate on Wednesday. Similar funds have been established by countries like Egypt and Indonesia, both facing challenging situations like Pakistan, with favourable outcomes, said Dar.

The finance minister affirmed that Pakistan is asset-rich, possessing a potential value of approximately $6 trillion in the mineral sector alone. The government’s objective is to attract investors to capitalise on these abundant resources.

To cater to different investment preferences, the minister announced the creation of sub-funds under the main fund, covering areas such as agriculture, green revolution, minerals, and mining. Investors will have the option to choose between the sovereign wealth fund, specific sector-focused sub-funds, or corporate structure special vehicles. The government is committed to facilitating friendly countries and investors, regardless of their chosen mode of investment.

To further support investors, the government has established a Special Investment Facilitation Committee, streamlining the process through a one-window facilitation approach. As a result, Pakistan’s ease of doing business ranking has improved, with the World Bank acknowledging the nation’s progress in this regard.

Dar also emphasised the importance of the Charter of Economy, a concept he had introduced earlier. He believes it is still possible to transform this idea into reality and propel Pakistan towards development.

The minister expressed his optimism that the turbulent times for Pakistan were now behind, and the country had entered a phase of stability. He confidently stated that the targets achieved in FY2016 would be regained, propelling Pakistan back on the path to becoming a member of the G20. Highlighting the nation’s vast resources and untapped potential, he emphasised that Pakistan was well-positioned to achieve this milestone.

Regarding inflation, the finance minister acknowledged that core inflation remains high, with 17% in rural and 19% in urban areas. However, the economic team projects a decline to 7% in the next two years, which would pave the way for a reduction in the policy rate.

Adding to the discussion, Minister for Planning, Development, and Special Initiatives, Ahsan Iqbal highlighted the need for stability and policy continuity in national development. He emphasised that consistent policies are vital for countries seeking to attract potential investors.

The China-Pakistan Economic Corridor (CPEC) project, initiated in 2013, has successfully completed numerous projects worth approximately $25 billion in the span of just a few years. One significant achievement was the commencement of mining and coal extraction in the Thar coalfield, providing job opportunities to the local population, thanks to CPEC investment and China’s technological support.

Furthermore, the government established the Special Investment Facilitation Council (SIFC), uniting all federal, provincial, and district departments involved in investment facilitation, which has proven to be a positive step towards attracting investments in Pakistan.

Prime Minister Shehbaz Sharif on Tuesday also said that the SIFC would ensure the immediate and uninterrupted completion of the projects of foreign investment in Pakistan.

Published in The Express Tribune, August 2^nd, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.