ISLAMABAD (INP): Chinese large-scale investment in power sector boosted Pakistan’s FDI figures significantly in the past few years, WealthPK reported on Saturday.
The report says, investment plays a significant role in the economic development of a country. In developing countries in particular, foreign direct investment (FDI) is the primary engine of economic growth.
Pakistan receives FDI from different countries, such as China, the United States, Japan, Norway, the United Kingdom, Saudi Arabia, and Switzerland.
The target sectors for FDI include the power and energy sector, financial business, construction, transport, textiles, and trade. The power and energy sector of Pakistan, one of the major sectors, receives the bulk of FDI.
Recently, the Government of Pakistan announced a new power policy offering different incentives for encouraging domestic and foreign investors to invest in the power and energy sector, WealthPK reported.
The launch of the China Pakistan Economic Corridor (CPEC) has provided a new window through which Pakistan’s economy can reach its height. Under this multibillion-dollar project, Chinese investment in Pakistan is gradually increasing, which is very important for economic development. Under the CPEC umbrella, FDI is a major opportunity for Pakistan, especially in the arena of resolving Pakistan’s energy crisis.
Talking to WealthPK, a spokesperson for the Board of Investment (BOI) said, “Chinese investors have always indicated interest in exploring more investment opportunities in Pakistan.”
“With the advent of the CPEC, FDI inflow has been consistently increasing, with China being the largest FDI source of Pakistan, which testifies to the fact that Chinese investors are keen on exploring more areas of investment in Pakistan.”
“Pakistan always welcomes Chinese investors in every sector, almost all sectors of economic activities, especially power, communication, infrastructure, electric machinery, tyre manufacturing, textile, petrochemicals, and ceramics.
As per the FDI data from FY Jul–Dec 2021, China remained the single largest foreign investor with a net investment of $306.7 million in the first half of the Fiscal Year 2021-22 followed by the United Kingdom with $39.8 million, USA with $149.3 million, and Switzerland with $55.3 million,” said the spokesperson.
Under the CPEC, the Chinese companies are working on different mega projects in the power sector. China Gezhouba Group Corporation (CGGC), an important force of the CPEC, which has played a key, leading, and exemplary role in the CPEC project, has invested in many energy projects such as the Neelum-Jhelum Hydropower Project, Suki Kinari Hydropower Project, Jhampir Wind Project, Karot Hydropower Project, Bhasha Hydropower Project, Dasu hydropower Project, and Azad Pattan Hydropower Project.
The spokesperson said, “Due to massive investment in the power sector under the CPEC, power shortage in Pakistan has been significantly reduced, and the peak demand is well below its installed capacity.
However, the government is working diligently to improve the transmission and distribution capacity, which is not on a par with the total requirement.”
Shedding light on the BOI policy, the spokesperson said, “Pakistan has adopted a very liberal investment policy that imposes no restriction on remitting capital and profits & dividends.
100% foreign equity and 100% repatriation of profits is allowed. Exemption of taxes on import of capital goods is available. All sectors are open for investments. Under the Board of Investment Policy, foreign investors are granted the same status as that of local and domestic investors, and all facilities available to local and domestic investors are extended to foreign investors on an equal basis.
Establishment of branch & liaison offices is also allowed.”
“For facilitation of investors, the Board of Investment is the responsible agency which provides all-out support.
As such, no major hurdles are faced by the Chinese investors, and if any, these are handled by the BOI, which has a dedicated Project Management Unit established for facilitation of Chinese/CPEC investors with the facility of Chinese interpreter to remove the language barriers.”
In an interview with WealthPK, socioeconomic development specialist in CPEC Authority Muhammad Adnan Khan said, “The CGGC has been working in Pakistan long before the launch of the CPEC and development in the field of energy cooperation, injecting a new impetus into the CPEC. Despite the Covid-19 pandemic, the CGGC is committed to the timely completion of energy projects under the CPEC in Pakistan.
It would significantly enhance clean energy production in Pakistan and provide low-cost clean energy for social and economic growth.”
In the modern era, economic cooperation has gained great importance for any country to establish and maintain relations with other states.
At present, among major foreign policy determinants, economic interests top the list. Pakistan is attaching top priority to such states from whom it expects economic benefits. In terms of Chinese FDI in Pakistan, the China-Pakistan Economic Corridor is the most significant project.
It will open a new era of economic prosperity for both countries. With successful implementation of this project, the whole region as well as the entire world will benefit.
The post Chinese investment enhances Pakistan’s FDI figures appeared first on The Frontier Post.