THE government on Wednesday made a decision to withdraw its proposal for a new Export Processing Zone (EPZ) in Balochistan, a move mandated by the International Monetary Fund (IMF). This development raises concerns about long-term implications of such conditions.The IMF’s directive to halt establishment of new Special Economic Zones (SEZs) and EPZs, coupled with expiration of existing tax incentives by 2035, represents a significant impediment to Pakistan’s economic aspirations.
While the IMF’s financial assistance is undeniably crucial for stabilising economy, these particular conditions threaten to stifle the very growth and industrialisation that the country so desperately needs. The initial proposal for an EPZ in Balochistan was driven by goal of boosting copper exports from Siah Diq. However, the Ministry of Finance’s opposition, influenced by the IMF’s stipulations, led to withdrawal of this proposal, highlighting a troubling precedent. The IMF’s conditions may undermine Pakistan’s economic autonomy and growth prospects as our economic strategy has long hinged on development of SEZs to attract foreign investment, stimulate industrialisation and enhance economic diversification. The ban on new zones not only curtails these ambitions but also jeopardises existing projects. Moreover, this restrictive policy threatens viability of the China-Pakistan Economic Corridor (CPEC), which envisioned nine SEZs across the country. The potential foreign investment that Pakistan has been eagerly seeking could be deterred by such harsh conditions, undermining economic progress that the country has strived to achieve. It is imperative for the government to engage in a constructive dialogue with the IMF to revisit and potentially lift these restrictive conditions. The government must advocate for policies that align with its development objectives while balancing the need for international financial assistance. It is also for the IMF to demonstrate flexibility in its approach and do not put conditions that stifle our economic growth.
