The International Monetary Fund has urged Pakistan to cease offering incentives for investment in industrial zones, potentially impacting the country’s efforts to attract Chinese industries. The IMF stated that tax breaks and subsidies will no longer be provided to new or existing special economic zones, aiming to create a fair investment environment.
Prime Minister Shehbaz Sharif’s push to persuade Chinese companies to relocate industries to Pakistan, aligning with the Belt and Road Initiative, may face hurdles due to the IMF’s condition. Pakistan’s plans to establish nine special economic zones under the China-Pakistan Economic Corridor could be affected.
Nathan Porter, IMF’s mission chief for Pakistan, emphasized the importance of offering a level playing field for businesses without compromising the tax base. The IMF’s demand may impact a proposed export processing zone at the Pakistan Steel Mills site in Karachi immediately.