KARACHI: Blessed with enormous natural resources, Balochistan – the largest province of Pakistan in terms of area – is ideally the best destination for foreign direct investment (FDI), which the country desperately needs to support the ailing economy.

Despite this immense potential, Balochistan has remained backward, thus depriving the country of the benefits the province offers in marine, mining, agriculture, oil and gas and other sectors of the economy. 

However, efforts are afoot to improve the law and order situation in the province by taking the political forces on board, which bodes well for the people of Balochistan in particular and Pakistan in general. 
Of late, the province has seen developments on the economic front as Saudi Arabia has announced to set up the mega project of an oil refinery under the government-to-government investment model. 

In this regard, Saudi Arabia has signed a Memorandum of Understanding with Pakistan to invest a staggering $15 billion in the refinery project, which is expected to generate over 200,000 job opportunities. 

In addition, Saudi Arabia has also extended its support by offering an additional $8 billion investment in the mining sector of the province.

Prior to this project, Saudi Arabia and China had been actively investing in Balochistan in various sectors, including the development of Gwadar Port and an airport. 

The Balochistan Board of Investment and Trade (BBoIT) says that numerous sectors are open for foreign investment. It says there is permission of up to 100% foreign ownership for investments in the province. It says that there will be no restrictions on foreign real estate developers in launching ventures in the province. Companies can make foreign equity investments without any bar, sell shares, transfer ownership, and de-register and repatriate profits, dividends or any other funds.

Besides, foreign companies can register online and open branch offices. There are legal provisions in place to recognise and enforce foreign arbitration awards. There are also guarantees against nationalisation and expropriation. A well-established regime is in place for registration, protection and enforcement of intellectual property rights. 

Work visas for technical and managerial personnel would be available under the bilateral investment treaties Pakistan has struck with 47 countries. There will also not be any double taxation.

However, there are areas that need to the focused on like provision of tax holidays for five to 10 years to the mining and mineral extraction companies, and duty exemptions on the import of equipment and machinery. The issuance of licences and getting approvals of environmental impact assessment agencies should also be streamlined. Besides, there should be zero customs duty on import of components for setting up power plants and LNG terminals. The power firms should also have a transmission charges waiver initially for supplying electricity to the national grid. The land leasing process for setting up warehouses, cargo handling and transport hubs should be expedited, and tax credits for infrastructure development should be provided. It should be ensured that approvals for setting up storage facilities and container yards are fast-tracked.

There should be lower utility rates for industrial units. There should also be income tax holidays for agro-processing units, and bank credit facilities at low interest rates.