Pakistan’s Investment Minister Qaiser Ahmed Sheikh acknowledged that the country missed out on attracting over $8 billion in foreign direct investment, mainly from China, and creating half a million industrial jobs from 2018 to 2024. This failure is attributed to the government’s neglect in developing industrial infrastructure, hindering foreign investment and the relocation of Chinese industries.
Despite securing substantial Chinese debt financing for energy and transport projects early on in the CPEC initiative, Islamabad’s inability to establish planned Special Economic Zones (SEZs) has impeded the relocation of Chinese capital and industries to Pakistan. The slow progress in developing SEZs over the past decade underscores a broader issue of inadequate execution and a lack of focus on industrialization as a national priority.
Policymakers’ emphasis on infrastructure and energy over industrial development post-CPEC launch has resulted in missed opportunities and investor reluctance. The delay in transitioning to industrial development has deterred export-oriented foreign investment, with only a few companies entering Pakistan primarily for the domestic market rather than establishing export-focused manufacturing bases.
The article highlights the potential for Pakistan to capitalize on rising costs in China and global supply chain shifts by attracting labor-intensive, export-oriented manufacturing. However, success in industrial relocation requires more than mere declarations; it necessitates the creation of credible and consistent ecosystems, as demonstrated by competing economies like Vietnam and Bangladesh.
