Islamabad, Oct 12: IMF’s Latest Demand Could Deter Chinese Investments in Pakistan. According to Bloomberg, Islamabad’s attempts to entice additional Chinese firms into the nation may be jeopardized by the International Monetary Fund’s request that Pakistan cease creating any industrial zones that provide incentives for investment.
According to a study released on October 10 by the Washington-based lender, the authorities would not grant tax advantages or subsidies to any new or current special economic zones. According to the research, this will assist create level playing fields for investment.
The need from the IMF comes at a time when Pakistani Prime Minister Shehbaz Sharif is attempting to persuade Chinese businesses to relocate more industries to Pakistan, thus reviving projects under the Belt and Road Initiative. Within the framework of the China-Pakistan Economic Corridor project, the nation planned to construct at least nine different stages of development special economic zones.
According to Nathan Porter, the IMF’s mission chief for Pakistan, the lender requested that Pakistan provide businesses with fair conditions in order to draw investments without jeopardizing the nation’s tax base.
In a briefing last month, he said that Pakistan’s inability to attain the kind of sustainable development rates many of its regional rivals have is due to the nation’s protection of or concessions to low-productivity sectors.
A new export processing zone that the government intends to construct at the location of Pakistan Steel Mills in Karachi, Pakistan’s commercial metropolis in the south, is anticipated to be directly impacted by the IMF’s Latest demand.
Following the acquisition of a $7 billion loan from the IMF, Pakistani officials are attempting to extend invitations to approximately one hundred leading Chinese enterprises to participate in the textile parks that Ruyi Shandong Group is set to begin developing in the provinces of central and southern Punjab later this year.
By providing enterprises established in these industrial zones with unique financial incentives, including as exemptions from paying taxes and customs fees on imported items, the Sharif government has been courting investors.China has constructed significant energy and infrastructure projects in Pakistan to support its flagship economic corridor initiative, which has benefited the country but left it heavily indebted.
