Recently, some very big numbers have been thrown around cavalierly: foreign direct investment in Pakistan will rise to $100 billion in the next few years, from barely $1.5bn in FY23, through the efforts of the Special Investment Facilitation Council. These dreams have been sold many times over the last seven decades.

“Pakistan would welcome foreign capital seeking investments from a purely industrial and economic object and not claiming special privileges. Pakistan capital must also be included in any enterprises that foreign capital undertakes,” said Pakistan’s first prime minister Liaquat Ali Khan on August 14, 1948.

Little did he know that the country would be selling off public-sector assets and state-owned businesses to Arab investors because foreign private companies have little incentive to invest in Pakistan.

However, he foresaw the indifference of Pakistani industrialists. “We are providing cheap yarn to the handloom industry, but our people are not paying attention to the industry it deserves,” he said in his independence address in 1950, bemoaning the lack of interest shown in the industry by local businessmen.

“Pakistan would welcome foreign capital seeking investments from a purely industrial and economic object and not claiming special privileges,” said Liaquat Ali Khan on August 14, 1948

And why should investment flow in, given its shoddy track record in the country. “A new era begins leading to the future technical maturity of our nation,” said former President Zulfikar Ali Bhutto when inaugurating Pakistan Steel Mill in 1973. In 1975, investments of Rs14bn were announced over the next several years to develop Pakistan’s Steel industry and reduce dependence on imports. Today, it is a loss-making entity that no one wants to buy.

Similarly, Orient Airways eventually evolved into Pakistan International Airlines (PIA) with great acclaim. “Pakistan, more than any other Asian nation, is the aerial crossroads between East and West,” said South China Morning Post,“ after PIA’s inaugural flight to China in 1964. It has become a top loss-making public sector entity and is slated to go under the hammer.

Regionally, Pakistan has not fared well in terms of security or trade. Pakistan and India relations are a far cry from when South Asian Association for Regional Cooperation (SAARC) was formed. “South Asia will be a region of peace and development where the seven free nations will work together for the uplift of their people,” the then Indian Prime Minister Rajiv Gandhi had said in 1985.

In terms of exports, Export Processing Zones (EPZ), the precursor to Special Economic Zones (SEZ), have met with limited success. As per the EPZ authority’s data, the zones cumulative exports till FY20 were $11.6bn, of which the bulk ($7.1bn) was from the Karachi Export Processing Zone that was set up in the 1980s. Thus the top-performing EPZ averaged about $250 million a year in exports.

“A new era begins leading to the future technical maturity of our nation,” said Zulfikar Ali Bhutto while inaugurating Pakistan Steel Mill in 1973

Now it is the era of SEZ, of which we have 30, including the ones that are notified, proposed, China-Pakistan Economic Corridor (CPEC) or non-CPEC.

There are many projects to remember and lament. The gold and copper mine of Saindak, that, after the completion of the project in 1995, would have earned $8.3 billion over 20 years, is one of them. Yet, it remains one of the poorest districts in Balochistan.

Reko Diq makes similar big promises, which according to a report in Profit, could deliver up to $76bn over the next half-century. CPEC and the Saudi investments in the refinery at Gwadar are the promises of the current generation. Whether they will yield better results or be another sad tale, only time will tell.

Published in Dawn, The Business and Finance Weekly, August 14th, 2023