SIFC Scope?

Pakistan has been facing several challenges for the past few decades, a few of which have become acute over the recent years. High inflation, faltering economy, deindus­trialization, circular debt, SOEs losses and drying up of FDI are some of the grave problems which are drowning the coun­try’s fiscal resources and have brought the country to the verge of bankruptcy.

The last few government(s) tried to cook half-baked measures and fudged figures for public consumption and to keep these problems under wraps. However, the fiscal conditions have now come to a head and these elephants in the room can no longer be ignored. Present­ly, ‘nuclear power’ is begging and bending over backwards for a mere couple of billions of dollars from international lend­ers. Interestingly, as always, these elite international lending in­stitutions are holding parleys with the elite of the country, who themselves are direct beneficiaries of these loans, while the pop­ulation which has to pay for these loans has no representation or say in the terms and conditions of loans, and how these loans will be utilised. To meet the conditions of these loans, instead of increasing the tax base, taxing the rich, and reducing its own op­erational expenditures, successive governments have hiked util­ities and petrol and diesel prices, which have broken the back of the middle and lower segments of society. The general populace is struggling to make ends meet. Even in the last parleys with the IMF, the interim government announced increasing utilities tar­iffs, yet again. Now, it is again being asserted that to seek fresh loan from the IMF, even tougher fiscal conditions may need to be imposed and new taxes may be levied on the local populace, who again are the least beneficiary of these ‘loans’.’

In the aforementioned scenario, a decision was made to form the Special Investment Facilitation Council (SIFC), with PM in chair and active participation of military leadership. SIFC is marketing certain multi-billion dollar projects in various sec­tors such as oil and gas, agriculture, and mining to internation­al investors, especially to GCC countries. However, what are the conditions and prerequisites which international investors for these projects would demand even before putting earnest mon­ey into these proposed projects is a big question Consequently, how much effort would be invested by SIFC in securing each of these foreign-funded projects, and how much time would be tak­en by these projects to come online to benefit the local economy and populace is the next big question.

Further, it is hoped that SIFC’s participation in economic deci­sion-making followed by effective implementation mechanisms will strengthen the political and democratic institutions of Paki­stan, an argument to be validated. Political and democratic insti­tutions supported on establishment stilts never become robust; rather, they, given our history, would become further inefficient and lackadaisical in their approach and will eschew from any di­rect responsibility. Therefore, it is prudent that the role of mili­tary leadership be of facilitator, while civilian setup is prodded to be more of in driving seat in projects identification, prioritiza­tion, and execution. Recently, it has been reported that SIFC has helped to earn over 200 million USD through exports.

However, on the flip side, we have local institutions such as DIS­COS, SOEs which are haemorrhaging in billions daily and if these losses are plugged by SIFC through divestment, privatization or reforms, it would be fiscally more productive and the results of such initiatives would be more immediate for the economy and the general population. Therefore, along with seeking foreign investment and promoting exports, we should be putting our house in order to improve the performance of institutions which play a part in economic development, and help local businesses acquire loss-making entities which the government decides to di­vest of, such as PIA, Railways, Steel Mill, DISCOs. The acquisition of these entities by local businessmen would help ensure that na­tional interests are not compromised from any facet.

Thus, national interests would be better served if SIFC pri­oritises initiatives to deal with the elephants in the room-loss-making entities and exorbitant government expenditure, which are bleeding our fiscal resources dry. It is imperative to plug the harrowing fiscal deficit which regularly necessitates begging from international lenders, and consequently con­stantly hiking utilities and petrol prices, and wringing the low­er and middle segments of society through ever new ingenious taxes to meet the loan conditions.

Ahsan Munir
The writer is a freelance columnist