BIT with Sweden to stay in place

Cabinet gives directive to probe reasons for issuing treaty termination notice

ISLAMABAD:

Pakistan has decided to continue the Bilateral Investment Treaty (BIT) with Sweden following intervention of the federal cabinet. Earlier, Pakistan had served a termination notice for BIT, which irritated Prime Minister Shehbaz Sharif in a recent cabinet meeting.

The cabinet gave directives to probe who had issued the notice and what were the reasons that led to sending the notice to Sweden to revoke the investment treaty.

The cabinet had called for constituting a committee, named "Committee on Bilateral Investment Treaties", to ascertain the reasons and approval processes followed before issuing the notice of termination of BIT signed between Pakistan and Sweden in 1981.

The committee has also been tasked to formulate guidelines to be followed before releasing such notices in the future, if any. It is examining possible outcomes of the termination of BITs with 25 countries under the Bilateral Investment Treaty (BIT) Strategy of Pakistan 2021.

The committee is also required to determine the relevance of BIT Strategy 2021 and Pakistan Model Bilateral Investment Treaty Template 2021 in the contemporary international economic context. It will prepare a draft BIT policy in relation to the evolving global economic context, covering investment protection provisions, most favoured nation (MFN) criteria, fair and equitable treatment standards, and dispute resolution mechanisms.

Meanwhile, Federal Minister for Board of Investment (BOI) Qaiser Ahmed Sheikh held a meeting with Swedish Ambassador Alexandra Berg von Linde to discuss strengthening bilateral economic relations, enhancing investment cooperation and exploring new opportunities for Swedish companies in Pakistan.

The federal minister underscored the longstanding and friendly relations between Pakistan and Sweden and acknowledged Sweden's strengths in education, governance, technology and innovation. He observed that the two countries had considerable potential to expand their economic partnership, particularly by translating their longstanding ties into greater investment, technology transfer and business-to-business collaboration.

Ambassador Linde too highlighted the longstanding connections between the two countries. She noted the presence of an active Pakistani diaspora in Sweden and the growing interest among Pakistani students in pursuing higher education there, providing further avenues for people-to-people contacts and institutional collaboration.

The meeting noted the presence of more than 40 Swedish companies in Pakistan, reflecting an established commercial footprint and significant potential for further engagement. These companies include Ericsson, IKEA, H&M and Tetra Pak, representing areas such as information and communication technology, retail, consumer goods and packaging.

The minister emphasised that Pakistan's large domestic market, young population and strategic location offered considerable opportunities to international investors. Discussing Pakistan's economic outlook, the federal minister recalled his recent visit to New York, where discussions centred on the challenge of translating Pakistan's demographic and economic potential into higher and more sustainable growth. He observed that Pakistan, as the world's fifth-most populous country, needed to expand productive investment, strengthen industrial capacity and increase value-added exports.

Referring to his recent interaction with the ambassador of Vietnam, he underlined the importance of export-oriented growth and the lessons Pakistan could draw from successful exporting economies. The minister stated that Pakistan was actively working to attract international investors and strengthen its position as an investment destination.

He pointed to improvements in key economic indicators, the country's external-sector position and sovereign credit assessments, including those issued by Moody's, as positive developments supporting investor confidence. He added that the government was placing greater emphasis on value-added exports, industrial development and the removal of barriers to investment, with interest emerging from international investors, including Chinese and American companies. He expressed Pakistan's desire to develop similarly strong investment partnerships with Swedish businesses.

The federal minister identified agriculture, mining and minerals, information technology, digital services, engineering, manufacturing and other productive sectors as promising areas for Swedish investment.