Islamabad: Pakistan has agreed to a key condition set by the International Monetary Fund (IMF) as part of its proposed $7 billion bailout package. The government will not establish any new special economic or export processing zones (SEZs) and will allow existing tax incentives for these zones to expire.
This decision impacts several planned initiatives, including a new export processing zone on the land of the closed Pakistan Steel Mills (PSM). The IMF’s condition affects both federal and provincial governments, but Khyber Pakhtunkhwa has resisted the ban, emphasizing the need for such zones to boost local industry and economic growth.
The IMF’s stringent conditions, including new taxes and higher electricity prices, have raised concerns about their potential impact on the economy and local industries. Despite accepting these conditions, Pakistan has not yet secured a date for the IMF’s executive board to approve the bailout package.
This restriction on SEZs could also slow efforts to attract Chinese industries as part of the China-Pakistan Economic Corridor (CPEC). The government remains committed to enhancing the investment climate, as demonstrated by recent engagements with Chinese business delegations interested in investing in Pakistan.
