A BIG opportunity to industrialise Pakistan has just passed us by. This has been reconfirmed by the investment minister who confessed that Pakistan had lost a chance to attract over $8bn in foreign direct investment, mostly from China, and generate half a million industrial jobs between 2018 and 2024. What he said is also an indictment of successive governments that have remained in power since the launch of the multi-billion-dollar CPEC initiative. By not paying sustained attention to building the industrial infrastructure, they have consistently failed to attract foreign investment and facilitate the promised relocation of Chinese industry. While Islamabad was able to secure significant Chinese debt financing for large energy and transport infrastructure projects during the early harvest period of the CPEC initiative, its failure to develop the planned SEZs for investors has proved detrimental to the promise of relocation of private Chinese capital and industries here.

The gap between ambition and delivery is too wide to ignore. The fact that only four SEZs have moved beyond the planning stage in over a decade exposes the deeper failure of execution. This underperformance highlights policymakers’ persistent inability to treat industrialisation as a long-term national priority. Since the launch of CPEC, policymakers have repeatedly emphasised infrastructure and energy, but have always envisaged the transition to industrial development as the ‘second phase’, which was neither prepared for nor planned. The result has been predictable: investor hesitation and missed opportunities. One of the stated aims of establishing these zones was to attract export-oriented foreign investment. The investors were expected to use Pakistan as a manufacturing base to export goods back to China and help bridge the widening trade imbalance, or to serve their existing markets elsewhere. Yet the few firms that did enter Pakistan largely did so to tap into its domestic market, rather than to establish export-oriented manufacturing bases. The minister is right to point to another opportunity for Pakistan. Rising costs in China and the ongoing rearrangement of global supply chains offer Pakistan a window, albeit narrow, to woo labour-intensive, export-oriented manufacturing. However, this opportunity will not materialise through declarations. Competing regional economies from Vietnam to Bangladesh have shown that success in industrial relocation depends on credible, predictable ecosystems, and not episodic policy attention. Will our policymakers seize this emerging opportunity?

Published in Dawn, May 7th, 2026