Pakistan Now: Darkest Before Dawn?

[Riaz Haq]

Pakistan is experiencing one of the darkest periods of its history. Political instability is eroding confidence in the nation's future. Declining economic growth and high inflation are hurting the people of all strata of society, particularly the poor whose numbers are rapidly rising. Is there any hope left for the country? Is it a case of the "darkest before dawn"? How do investors see it? 

Ex PM Imran Khan (R) with President Erdogan

Writing in the Time magazine immediately after the recent arrest of former Prime Minister Imran Khan, American investor, author and commentator Zachary Karabell who has invested in Pakistani startups sees rare hope for Pakistan. He sees Pakistan where Turkey was back in 2001-2003, "when a series of elections brought Recep Erdogan to power even as he was repeatedly disqualified by a military that was determined to retain control". Here's an excerpt of his article titled "The Contrarian Case for Pakistan" published in the current issue of Time Magazine: 

"To some degree, this is an argument of “well, it’s not as bad as they say.” But it’s also a way of highlighting that Pakistan today may be a case of darkest before the dawn. With elections schedule for the fall, and with Imran Khan the most likely victor of said elections unless is his arrest leads to his disqualification as a candidate, Pakistan is in a very similar position to where Turkey was in 2001-2003, when a series of elections brought Recep Erdogan to power even as he was repeatedly disqualified by a military that was determined to retain control. Imran Khan has many of the same strengths and weaknesses of Erdogan, who after championing Turkish democracy and economic reform, then turned into the very type of corrupt autocrat that he had once fought against. But he nonetheless unleashed massive economic potential in Turkey and has left its 80 million people materially better off over the past 20 years, even as hyperinflation and Erdogan’s recent economic ineptitude is now eroding that. Should Imran Khan return to the head the government, he may well usher in a similar period in Pakistan, even as he has his own authoritarian and demagogic tendencies". 

Here are some of the key points Karabell makes in his opinion piece:

1. Pakistan has a real and dynamic private sphere that is not only seeing a start-up and new business ecosystem that has attracted hundreds of millions of dollars a year for the past few years but operates freely in a way that would be inconceivable in many other countries. Compare it to Egypt, for example, which receives far less negative attention and more foreign money yet is almost entirely dominated by a military dictatorship. Or Algeria. And then there are countries which barely function at all, dominating a whole swath of Sub-Saharan Africa but also dot central Asia (Tajikistan anyone?).

2. Pakistan is the fifth most populous country in the world with 230 million souls, a median age of barely 22 and two-thirds of the population under the age of 30. That means unlike most of the world, it has a favorable demographic future.

2. Unlike, say, Nigeria, where the ethnic divisions and decades of corruption mean that it well-nigh impossible to treat the country as one unified market for goods and services, Pakistan is one common market even with its various tribal divisions.

Pakistan Population Youngest Among Major Asian Nations. Source: Nik...

Karabell concludes with the following: 

Pakistan is on a cusp. We should honor the fact that whichever way the consensus believes it will go, the country is also poised to breakout on the upside. Which path will only be clear in retrospect, but we should pay more attention to the potential of things going right along with the legitimate focus on all that is going wrong.

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[Riaz Haq]

UAE, Saudi Arabia race for investment in Pakistan

https://www.al-monitor.com/originals/2023/08/uae-saudi-arabia-race-...


Sabena Siddiqui


Both Riyadh and Abu Dhabi are prepared to develop closer business ties with less red tape, but experts caution that the Gulf nations stand to benefit most.

The UAE and Saudi Arabia have accelerated the pace of investments in Pakistan. If Abu Dhabi decides to invest further in Pakistan, it is quite likely that Riyadh will follow suit as part of their unspoken rivalry.

Since 2021, the kingdom has been giving incentives to multinational companies to headquarter at Riyadh. Therefore, even though Dubai is an established regional business hub, Riyadh is becoming its top competitor as a leading logistics center.

If a UAE-Saudi business race starts off in Pakistan, Islamabad will have to balance both of its close allies.

In search of a viable long-term solution to prop up its ailing economy, cash-strapped Islamabad has created a Special Investment Facilitation Council (SIFC), which has offered 28 high-value projects worth billions of dollars to friendly countries. The main focus is on Saudi Arabia, UAE, Qatar and Bahrain.

First to avail the opportunity, the UAE-based AD Ports group leased four berths at Karachi Port for 50 years and around $220 million in June. Just weeks later, Abu Dhabi inked a second major seaport terminal deal. As a result, around 85% of East Wharf would be controlled by the UAE company.

Zeeshan Shah, a financial analyst at FINRA in Washington, “The increasing rivalry between the Saudis and Emiratis should not be overlooked as both countries will probably try to one-up the other. ... Pakistan will have to be prudent in being even-handed between both countries if they happen to compete for various investment opportunities.”

Not lagging far behind, Saudi Arabia’s Aramco has signed a memorandum of understanding with four Pakistani state-owned oil companies to build a $12 billion greenfield oil refinery at Gwadar in the province of Baluchistan. The local companies would contribute 70% equity while Aramco would initialize the project with 30% equity.

Meanwhile, Pakistan has also offered its major airports for investment, and Saudi companies are interested in airports outsourcing.

Zubair Faisal Abbasi, a development policy and management specialist based in Islamabad, told Al Monitor, “Pakistan requires foreign investment to expand and further diversify its economy. It envisions scaled-up IT sector contribution in the exports-based economy, and also seeks modernizing investments in agriculture sector to increase productivity. In addition, the country has huge potential in the mining sector.”

Ranging from copper and gold mines in Chagai, the Thar Coal Rail Connectivity scheme to the Diamer-Bhasha dam and agricultural farms, the investment from these projects could go even higher than the $28 billion invested under the China-Pakistan Economic Corridor up till now, if all the projects get picked up by the Arab states.

In the past, the absence of a swift, one-window operation for foreign investors used to be an impediment. But now, the SIFC mechanism has made things easier, especially as adequate legal cover has been provided.

Abbasi noted, “One of the binding constraints on Pakistan’s economic growth has been bureaucratic inertia and problematic economic governance due to 'sludge' in the economic policy implementation.” The SIFC, he said, can “reduce red tape, bring in efficiency, and create synchronization in decision-making processes. Therefore, the investments may not only change sector growth, but also alter the institutional arrangements of economic governance.”

[Riaz Haq]

UAE, Saudi Arabia race for investment in Pakistan

https://www.al-monitor.com/originals/2023/08/uae-saudi-arabia-race-...


Sabena Siddiqui


Providing equity for SIFC-approved projects for joint ventures, a Pakistan Sovereign Wealth Fund has also been created. In due course, seven profitable state-owned entities worth up to $8 billion are to be transferred to this fund.

However, Shah cautioned that the Saudis and Emiratis' interest stems from "the removal of red tape, the ability to purchase potentially lucrative assets, and security of their investments, rather than being attracted to invest in Pakistan by structural economic reforms which would strengthen the Pakistani economy in the long term as well as Pakistani bargaining power as well.”

For now, in reaction to the Gulf investments, the Pakistan stock market remains positive, reaching a two-year high.

From the GCC, Qatar is also considering the investment offer, and Doha is having talks with Pakistan to jointly run the terminals of its three main airports, Karachi, Lahore and Islamabad. If this comes through, Doha would invest around $3 billion in cargo handling as well as providing five-star accommodation and modern facilities at the airports.

In order to improve its food security, Doha is also considering a 10,000-acre corporate farming project in the Cholistan desert in Punjab province.

[Riaz Haq]

UAE, Saudi Arabia race for investment in Pakistan

https://www.al-monitor.com/originals/2023/08/uae-saudi-arabia-race-...


Sabena Siddiqui


Providing equity for SIFC-approved projects for joint ventures, a Pakistan Sovereign Wealth Fund has also been created. In due course, seven profitable state-owned entities worth up to $8 billion are to be transferred to this fund.

However, Shah cautioned that the Saudis and Emiratis' interest stems from "the removal of red tape, the ability to purchase potentially lucrative assets, and security of their investments, rather than being attracted to invest in Pakistan by structural economic reforms which would strengthen the Pakistani economy in the long term as well as Pakistani bargaining power as well.”

For now, in reaction to the Gulf investments, the Pakistan stock market remains positive, reaching a two-year high.

From the GCC, Qatar is also considering the investment offer, and Doha is having talks with Pakistan to jointly run the terminals of its three main airports, Karachi, Lahore and Islamabad. If this comes through, Doha would invest around $3 billion in cargo handling as well as providing five-star accommodation and modern facilities at the airports.

In order to improve its food security, Doha is also considering a 10,000-acre corporate farming project in the Cholistan desert in Punjab province.

[Riaz Haq]

FROM CRISIS TO HOPE: WHAT CPEC PHASE-II CAN OFFER PAKISTAN

https://tribune.com.pk/story/2429531/from-crisis-to-hope-what-cpec-...

At a time when Pakistan faces severe economic challenges, the renewal of CPEC's second phase comes as a timely opportunity to address the country's immediate needs while paving the way for long-term development. As BRI's flagship project, CPEC has already demonstrated its transformative impact on Pakistan's infrastructure, energy, and regional connectivity. Now, with the initiation of Phase-II, the partnership between China and Pakistan is set to deepen further, solidifying their strategic relationship.

The expansion of cooperation into rural revitalisation and agricultural development holds immense potential to uplift Pakistan's rural communities and boost the agriculture sector—a crucial backbone of the country's economy. Additionally, the focus on industrialisation and green development aligns with Pakistan's aspirations for sustainable growth and environmental conservation. Through the transfer of technology and expertise, CPEC's second phase promises to enhance Pakistan's capabilities in these critical areas.

Vice Premier He Lifeng's visit to Pakistan and the signing of six MoUs demonstrate China's continued commitment to the success of CPEC. Despite global economic challenges and geopolitical complexities, China's unwavering support signals a firm belief in the project's potential to bring mutual benefits to both nations.

As CPEC enters its second phase, President Xi Jinping's statement takes on heightened significance. By emphasising high standards, sustainability, and livelihood enhancement, Xi underscores the importance of inclusive growth and the well-being of the people at the heart of CPEC's objectives. This reaffirms the project's commitment to fostering shared prosperity and a closer China-Pakistan community with a shared future.

Moreover, President Xi's statement of standing firmly with Pakistan, regardless of changing international landscapes, further solidifies the all-weather friendship between the two nations. In a time of global uncertainties, China's steadfast partnership provides much-needed reassurance for Pakistan's economic revival efforts.

Despite criticism from Western analysts, with accusations of 'debt-trap diplomacy', CPEC has not solely relied on bilateral governmental investments; it has attracted private Chinese investments across various sectors, stimulating employment and economic opportunities in Pakistan. Moreover, China's foreign policy, emphasising non-interference in the internal affairs of other sovereign states, has led to limited meddling in Pakistan's politics or economic policies, unlike some Western multilateral financial institutions.

To fully capitalise on the opportunities presented by CPEC's second phase, Pakistan must prioritise political stability, policy continuity, and broad-based economic reforms. The government's focus on fiscal discipline and economic growth aligns with the goals of CPEC, making it essential to overcome internal challenges and create an enabling environment for investment and development.

As President Xi's upcoming visit to Pakistan approaches, anticipation builds for further high-level discussions and agreements that will reinforce the trajectory of CPEC's success. It is a momentous occasion that will not only deepen China-Pakistan ties but also set the stage for accelerated progress in the second phase of this transformative economic corridor.

[Riaz Haq]

Dependency ratio is the ratio of children (under 15) and retirees (65 and above)) to working age (15-64 years) people in a population. Countries with high dependency ratios tend to perform poorly relative to countries with low dependency ratios in terms of economic growth.

A recent NY Times article by Lauren Leatherby titled "How a Vast Demographic Shift Will Reshape the World" uses charts and graphics to show how the world economic landscape will change during the rest of the century.

It shows that Pakistan will join the top 10 countries with highest share of working age population and lowest dependency ratios.

https://www.nytimes.com/interactive/2023/07/16/world/world-demograp...

Pakistan will join top 10 countries in working age population in 2050

Bangladesh is already in the top 10 working age population countries today.

https://www.nytimes.com/interactive/2023/07/16/world/world-demograp...


Countries are categorized as having large working-age populations if people between the ages of 15 and 64, an age group commonly used by demographers, make up at least 65 percent of the total population.

Countries where at least a quarter of the population is under age 15 and where less than 65 percent of the population is working age are categorized as having a large young population. Countries are categorized as having a large old population if those age 65 and older make up more than a quarter of the population.

Unless noted otherwise, graphics include all countries with a population of at least 50,000 people.

The world’s demographics have already been transformed. Europe is shrinking. China is shrinking, with India, a much younger country, overtaking it this year as the world’s most populous nation.

But what we’ve seen so far is just the beginning.

The projections are reliable, and stark: By 2050, people age 65 and older will make up nearly 40 percent of the population in some parts of East Asia and Europe. That’s almost twice the share of older adults in Florida, America’s retirement capital. Extraordinary numbers of retirees will be dependent on a shrinking number of working-age people to support them.

In all of recorded history, no country has ever been as old as these nations are expected to get.

As a result, experts predict, things many wealthier countries take for granted — like pensions, retirement ages and strict immigration policies — will need overhauls to be sustainable. And today’s wealthier countries will almost inevitably make up a smaller share of global G.D.P., economists say.

This is a sea change for Europe, the United States, China and other top economies, which have had some of the most working-age people in the world, adjusted for their populations. Their large work forces have helped to drive their economic growth.

Those countries are already aging off the list. Soon, the best-balanced work forces will mostly be in South and Southeast Asia, Africa and the Middle East, according to U.N. projections. The shift could reshape economic growth and geopolitical power balances, experts say.

[Riaz Haq]

Aging populations will shake up the global economy by 2050



https://www.marketplace.org/2023/08/10/by-2050-demographic-shifts-c...

Earlier this year, the United Nations put out new data showing that China, which has been the most populous country in the world for at least the last 70 years, has been overtaken by India in population size.

And, based on population projections for the next few decades, that’s far from the only big demographic shift we’ll be seeing in the near future.

Lauren Leatherby is a visual journalist with the New York Times who has been looking into what those demographic shifts will mean for economies around the world. She joined Marketplace’s Kai Ryssdal to talk about how the world will shift by 2050. An edited transcript of their conversation is below.

Kai Ryssdal: On paper, or, as it were, on the internet, this is great story because the graphics are kind of amazing. And they really illustrate it. It’s a little trickier to do on the radio, but that’s fine. That’s kind of my job. I do wonder, though, how you got interested in this story.

Lauren Leatherby: The richest most powerful countries today have long had these really large working-age populations. And economists agree that that’s been a huge, huge advantage economically and geopolitically. And meanwhile, a lot of developing nations have had quite high dependency ratios having a high number of children compared to working-age people. And so, I think we know a lot of these storylines one by one, but putting it all together, it’s just like the world is going to shift really dramatically.



Ryssdal: The example that comes up pretty early in this piece is, of course, Japan, which has already started to make that shift from having a good, robust, working-years workforce to a much older population with far fewer workers.

Leatherby: Absolutely. And then I think what we see in Japan today is only the tip of the iceberg. A lot of East Asia, China, Europe, South Korea will be much older than Japan is today, in just you know, 20 or 30 years. Some countries will have upwards of 40% of their population that are 65 or older in just two or three decades. And meanwhile, on the other end, you have a lot of these other countries that have long been, you know, hindered economically by their age structures. And suddenly a lot of them will start to enjoy the exact same age structures that Europe and East Asia, the U.S., that a lot of those countries have historically enjoyed.

Ryssdal: Right. So what happens in a population, what happens in a country, when that shift happens when that prime-age workforce is big enough to support all the retirees? What does it let that country do? What is the opportunity?

Leatherby: The upside can be absolutely enormous. Some of the best research is that a third of the economic growth in East Asia at the end of the last century is because of this concept of a demographic dividend. But what the experts who I spoke to were very cautious to say is that it’s not automatic.



Ryssdal: It’s not automatic, but we’ve been told, and I say this every now and then, that demographics is destiny. And yet, actually, maybe it’s not.

Leatherby: Yeah, because it can go multiple ways. I mean, if you have the policies in place with education, with good jobs, then that can be a tremendous upside. But I think the perilous thing that we worry about is extremism. I mean, what studies have shown is that [for] a lot of people that turn to extremism, it’s not because of religious ideology, it’s because it’s a better job opportunity. It’s economics. And so it’s just going to be really critical that these places that have suddenly a huge number of, like, healthy 21-year-olds, that they have jobs and education for those people.

[Riaz Haq]

#Arab Gulf Nations (#SaudiArabia, #Qatar, #UAE) Poised to Invest Billions in #Pakistan.
#Islamabad’s powerful #military has sought to ease the path for oil-rich monarchies to acquire stakes in #mining (#copper, #gold) & #energy (#refinery) https://www.wsj.com/articles/gulf-nations-poised-to-invest-billions... via @WSJ

The Saudis are in talks to buy into a copper mine being developed at a cost of $7 billion by Canada’s Barrick Gold in western Pakistan, according to people familiar with the project. Separately, negotiations are at an advanced stage to set up a Saudi oil refinery in Pakistan, which could cost up to $14 billion, according to Islamabad and Gulf officials.

For the Gulf states, the deals represent a shift from when they provided loans or grants to poorer countries in the region, such as Pakistan or Egypt, to a new focus on acquiring assets for their sovereign-wealth funds.

Pakistan, a nuclear-armed nation of 240 million, has been racked by an economic crisis and political instability. It reached an agreement with the International Monetary Fund in June on another bailout.

Its powerful military, which has clamped down on political freedoms in recent months, is seeking to ease the path for investment by streamlining the deal-making process for Gulf investors, who had complained about red tape and political indecision in the past.

Mining, energy infrastructure, farmland and privatizations of Pakistani government businesses could all be part of the planned selloff to Saudi Arabia, the United Arab Emirates and Qatar, which are increasingly competing for assets in struggling political allies.

This summer, Islamabad established the Special Investment Facilitation Council, which includes the army chief, to smooth the bureaucratic path for Gulf investment.

“Pakistan is strategically located, at the junction of the engines of growth in Asia, between south Asia, central Asia, China and the Middle East,” said Ahsan Iqbal, Pakistan’s departing planning minister, who also heads the executive committee of the Special Investment Facilitation Council. “There is a very big opportunity for investors to come here, as long as we can give them assurance that there will be continuity of policy for their investment.”

The Saudi deputy mining and foreign ministers visited Islamabad this month for talks about the investment initiative.

Pakistan Prime Minister Shehbaz Sharif said Wednesday that Parliament would dissolve, ahead of elections that are likely to be delayed into next year. The installment of a nonpolitical caretaker government in Islamabad in the next few days, to oversee the period up to the next election, is expected to kick-start the deals. New powers have been given to the caretaker administration, which will likely be under even greater influence of the military, to enable it to make major economic decisions.

The army is Pakistan’s dominant institution, a permanent power in a country where no prime minister has completed a term in office. The Gulf has long dealt directly with Pakistan’s army, the sixth largest in the world, which has provided a contingent of troops to Saudi Arabia for decades. The first overseas trip for Pakistan’s current army chief, Gen. Asim Munir, was to Saudi Arabia, where he met Crown Prince Mohammed bin Salman in January.

A splurge in Pakistan is expected to come from government-owned entities in the Gulf, which in recent years have invested in Egypt, a country also in the midst of an asset sale, as well as Sudan, Ethiopia and elsewhere in the Horn of Africa.

“For the Gulf, Pakistan and Egypt are a regional security priority,” said Karen E. Young, a researcher at Columbia University’s Center on Global Energy Policy. “They absolutely cannot afford to see a failed state in Egypt or Pakistan.”

[Riaz Haq]

#Arab Gulf Nations (#SaudiArabia, #Qatar, #UAE) Poised to Invest Billions in #Pakistan.
#Islamabad’s powerful #military has sought to ease the path for oil-rich monarchies to acquire stakes in #mining (#copper, #gold) & #energy (#refinery) https://www.wsj.com/articles/gulf-nations-poised-to-invest-billions... via @WSJ

Egypt and Pakistan offer big populations, large tracts of arable land and huge armies, all attributes lacking in the Gulf, said Faisal Aftab, founder of Pakistan-based Zayn Venture Capital.

“This is a last chance for Pakistan,” said Aftab. “It needs to leverage in investment.”

Iqbal, the planning minister, said Pakistan was hoping for deals worth around $25 billion, including in solar energy and information technology. Pakistan’s defense industries are also open for investment, and the country is prepared to offer uncultivated government land on long leases for agriculture.

The Gulf nations haven’t put figures in recent weeks on how much they might spend. In January this year, the Saudis said they were willing to invest $10 billion, after Pakistan’s army chief visited.

Economic crises in Egypt and Pakistan, which have been buffeted by higher fuel and food prices from the Russia-Ukraine war and seen their currencies plummet, mean that assets are potentially available on the cheap. But Riyadh has still balked at prices in Egypt, meaning fewer deals than anticipated have materialized so far. Pakistan will also have to manage competition between Gulf nations for assets, already being felt, especially between Saudi Arabia and U.A.E., which have strained relations.

Among the first contracts likely to attract interest, from both U.A.E. and Qatar, is a tender announced this week, by open bidding, to run terminal services at Islamabad airport. The two Gulf countries fiercely competed for the contract to run Kabul airport in Pakistan’s neighbor Afghanistan, a contest won last year by the U.A.E. Islamabad is also looking for investors to take on its national carrier, Pakistan International Airlines.

Musadik Malik, Pakistan’s departing petroleum minister, said that a deal for a Saudi refinery was “very close.” Saudi Aramco, the company named by Pakistani officials as its partner for the project, declined to comment. The refinery would likely be located at Gwadar, the port developed by China on the Arabian Sea, and the centerpiece of Beijing’s investment program in ally Pakistan. Riyadh is moving closer to Beijing, at the expense of its relationship with Washington.

Officials from both sides are aiming for a final deal on the refinery—which would be the country’s biggest—by the end of this year, with construction to begin early in 2024.

Malik said that he anticipated a series of mining deals that would be much bigger in value than the refinery contract.

“We have enormous untapped resources just sitting there,” he said.

The obvious prize is copper, a metal needed in the transition to cleaner energy. One of the world’s biggest new copper mines is expected to begin production in 2028. The Reko Diq mine is a joint venture between Barrick Gold and the government of Pakistan, in a remote part of the country hit by two violent insurgencies.

Talks are under way for the Saudis to buy into the Reko Diq mine. The Saudi sovereign-wealth fund, Public Investment Fund, would team up with Saudi mining company Ma’aden, to acquire part of the 50% stake in the mine owned by Pakistan, according to people involved. In addition, the Saudis could be given exploration rights in other parts of the copper-rich area.

[Riaz Haq]

#Arab Gulf Nations (#SaudiArabia, #Qatar, #UAE) Poised to Invest Billions in #Pakistan.
#Islamabad’s powerful #military has sought to ease the path for oil-rich monarchies to acquire stakes in #mining (#copper, #gold) & #energy (#refinery) https://www.wsj.com/articles/gulf-nations-poised-to-invest-billions... via @WSJ

Riyadh has ambitions to turn Ma’aden into a global company, but it is wary of the security risks at the Pakistani mine. In July, Saudi Arabia said it would buy a $2.5 billion stake in Brazilian mining company Vale, also through the same fund and Ma’aden.

For Islamabad, there are strategic advantages to tying Saudi Arabia in, while Barrick has joined with Saudi Arabia elsewhere too. Barrick and Ma’aden didn’t respond to requests for comment. The Public Investment Fund declined to comment.

The Saudis are the most interested in the mining opportunities, say officials and experts, while the U.A.E. is looking most keenly at agriculture, clean energy and logistics.

Just ahead of the launch of the Gulf initiative, the U.A.E. swooped in early, acquiring a 50-year lease in June to operate part of the container terminal at Karachi port. The financial terms weren’t disclosed for the deal, which was awarded without an open bidding process. Many coming transactions are also not expected to involve competitive bidding, Pakistani officials say. That approach could open the divestments up to domestic controversy.

[Riaz Haq]

The Special Investment Facilitation Council’s Role in Pakistan’s Economic Resurgence


https://thediplomat.com/2023/08/the-special-investment-facilitation...

The SFIC has to strike a balance between including military decision-makers to raise investor confidence and upholding democratic governance.

By Shabbir Ahmed

The inception of the Special Investment Facilitation Council (SIFC) represents a pivotal juncture in Pakistan’s economic evolution. Intended to attract foreign investments and invigorate economic growth, this pioneering initiative has captured national attention. Nevertheless, as the SIFC emerges as a distinctive amalgamation of civil and military entities, it ignites discussions surrounding the nuanced equilibrium between safeguarding policy coherence, upholding the principles of democratic governance, and managing the military’s active role in shaping economic decisions.

This convergence of interests and authority prompts an exploration of how this “hybrid” forum can effectively navigate its responsibilities, engender investor confidence, and ensure that the military’s involvement aligns harmoniously with the broader democratic fabric of the nation.

The SIFC’s creation is rooted in a dire need for economic rejuvenation, particularly in the face of bureaucratic hurdles and regulatory complexities that deter foreign direct investment (FDI). By providing a platform to streamline cooperation with Gulf Cooperation Council (GCC) nations, the SIFC aims to unlock investment opportunities across sectors ranging from agriculture to information technology. Nonetheless, the inclusion of military officials in key roles raises questions about the balance between civilian and military authority, reflecting both opportunities and challenges.

Prime Minister Shehbaz Sharif’s proclamation of the SIFC as a “unified approach” toward economic challenges underscores the value of collective insight. Undoubtedly, cooperative endeavors that engage both civilian and military leadership hold the promise of establishing policy steadiness and instilling confidence among foreign investors. Yet, the crux of the matter resides in harmonizing the military’s role with, rather than eclipsing, civilian authority. This equilibrium is essential to safeguarding the tenets of democracy, upholding accountability, and preventing the erosion of democratic values. The success of this collaborative venture hinges on the delicate choreography between these two distinct spheres, facilitating an environment wherein policy predictability is fortified without compromising the essence of democratic governance

The decision to entrust the SIFC with a substantial military presence emerges from a broader context of geopolitical considerations and the desire to instill investor confidence. The involvement of Saudi Arabia, Qatar, and the United Arab Emirates in pressing for military-backed guarantees highlights a lack of confidence in Pakistan’s political stability and its ability to honor business agreements across government transitions. The army’s engagement in the SIFC could offer a sense of continuity, but it also underscores the need for comprehensive, long-term policy reforms to address underlying structural challenges.