Why SIFC fails to deliver FDI

2026-02-09 - 00:06

SIFC is structurally flawed – seriously flawed. SIFC is a coordination forum, not astatutory investment authority. SIFC cannot legally bind provinces, regulators, utilities, or courts. Investors still face fragmented approvals after the “facilitation” meeting. Singapore’s Economic Development Board (EDB) operates under a clear statute. EDB signs, commits, and executes. EDB attracted $461.3 billion in FDI net inflows over the past three years. Pakistan attracted $6.24 billion over the same period. Rwanda’s Rwanda Development Board (RDB) was created by dissolving eight agencies into one law-backed authority. RDB managed to attract over $1 billion in the past three years for a $14 billion economy that is transformational capital. SIFC has three structural problems. First, line ministries retain veto power. Second, provinces control land, taxes, and labour. Third, regulators remain autonomous—and slow. At SIFC, investors are briefed fast, but approved slow. When EDB approves, land, utilities, visas, and tax incentives follow automatically. RDB issues licenses, registers firms, and clears permits under one roof. SIFC convenes—but it does not command, so files still move after approval. SIFC has no dedicated after-care division. SIFC has no systematic tracking of stalled or exiting investors. SIFC has no escalation protocol when contracts fail—on power, gas, foreign exchange, or the courts. At EDB, the real work begins after the investment decision: retention, expansion, and upgrades. RDB tracks investor pain points every year—and intervenes. Red alert: Pakistan courts new capital while bleeding old capital. Remember, investment is not won at entry; it is lost in neglect. SIFC has three additional problems. First, strategic signaling is strong. Second, operational authority is blurred. Third, investors worry about continuity once personalities change. Remember, signals attract interest – authority retains capital. Yes, SIFC has power – but power without predictability scares long-term capital. SIFC was created to play a certain role in Pakistan — to cut across ministries, provinces, and regulators — but its approvals still require parallel clearances outside the system. Yes, SIFC brings everyone to the table—but no one is compelled to act. How to put SIFC right? To begin with, convert SIFC into a ‘Statutory Investment Authority’ by passing a SIFC Act. Give SIFC legal supremacy over federal agencies for approved projects. Bind timelines, penalties, and automatic clearances. Red alert: Singapore’s EDB works because law outranks bureaucracy. Next. Merge BOI, the SEZ Authority, and all investment cells into SIFC. One chairman. One balance sheet. One signature. Rwanda’s RDB worked only after institutional consolidation. Lesson to be learnt: Fragmented mandates repel capital; unified authority attracts it. Create a dedicated investor ‘After-Care Command’ with project-wise account managers Lesson: Retained investors reinvest faster than new ones arrive. SIFC must offer a fast-track dispute resolution. Remember, once a contract hits a court, the investment is effectively dead. For capital, time to judgment matters as much as electricity and tax rates. SIFC must begin underwriting risk. SIFC must begin guaranteeing foreign exchange convertibility and compensate investors for policy reversals. Remember, in high-risk jurisdictions, capital does not arrive without a sovereign backstop. Question: What does Singapore’s EDB sell? Answer: Certainty. Question: What does Rwanda’s RDB sell? Answer: Speed. Question: What does Pakistan’s SIFC sell? Answer: Meetings. Bottom line: without the power to sign, bind, and deliver, SIFC will attract interest—but no FDI. —The writer is a journalist and political analyst.