SEZ’s and Foreign Investment

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CPEC is a jewel in the crown of the Belt and Road Initiative (BRI), experts have underscored that it carries the potential to transform the destiny of Pakistan for good. They are optimistic that the energy projects being implemented in Tharparkar district under CPEC will add another 3,500 megawatts to the national grid over the next six to nine months, thus aiding the country in getting out of the energy crisis. Special Assistant to Prime Minister on CPEC Affairs Khalid Mansoor during a dialogue revealed that new energy projects under CPEC added around 5,300MW to the national grid, while multiple projects are at the planning phase which, once operational, would enhance the capacity by 4,144MW. Pakistan has a total of nine SEZs and a free zone at Gwadar. Currently, the development of four SEZs one in each province and the free zone is the priority of the government under the CPEC development plan. It is the view of the government that Gwadar is a crucial free zone as it could become the regional trade hub in the future.  Around 46 enterprises registered in the Gwadar Free Zone phase-1 of which 10 industrial units are currently operational. Regarding foreign investment in free economic zones, investors have to obtain 37 approvals and NOCs in order to move to the country. Pertaining to this, amendments to the SEZ Act has approved by the cabinet last month, which will legally empower the management of every SEZ to obtain approvals for Chinese investors. Now the main issue is the lack of execution, while the country has a lot of opportunities.  From the legal standpoint, CMS Cameron McKenna Nabarro Olswang LLP Legal Director Hassan Aslam Shad highlighted the bureaucracy and domestic legal framework as the two issues impeding the investment regime in the country, he said, “Historically, bureaucracy in Pakistan has stymied several important initiatives like CPEC, Now, it is high time, either the country should reform the bureaucracy or remove the bottlenecks from it.” In the meantime, with the advent of the second phase of CPEC, it is hoped that Pakistan will further attract foreign investment.

 

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