Tariq Mahmood Awan
Pakistan’s recent Pakistan Minerals Investment Forum, a two-day event held with the aim of unlocking the country’s vast untapped natural resources, has drawn attention both locally and internationally. Prominent attendees included Prime Minister Shahbaz Sharif and Chief of Army Staff General Asif Munir—two figures symbolizing the dual thrust of the country’s investment pitch: economic incentives and security guarantees. But while the forum projected optimism and ambition, a deeper analysis reveals longstanding structural, legal, and governance challenges that continue to hinder Pakistan’s ability to turn MoUs into real economic gains.
Prime Minister Sharif was right to highlight Balochistan’s mineral wealth, particularly the Reko Diq project, one of the world’s largest untapped copper-gold reserves. He praised Barrick Gold CEO Mark Bristow for reviving a project that had become emblematic of Pakistan’s policy paralysis and legal mismanagement.
The ownership structure of Reko Diq—50% Barrick, 25% Pakistani federal entities, and 25% to the Balochistan government—represents a hard-fought consensus after years of litigation. But it also illustrates how poor contract management and unclear federal-provincial coordination can stall progress on projects of national significance. In fact, successive governments failed to move the project forward due to conflicting interests, lack of legal clarity, and weak institutional continuity. Only in 2022 did a final agreement materialize, after years of costly delays.
The lesson is clear: policy consistency and contractual continuity across administrations are critical for investment success. Yet in Pakistan, it remains common for contracts to be signed without thorough due diligence, legal vetting, or long-term planning, often resulting in international arbitration and hefty compensation payouts. Without structural reform in how such agreements are crafted and executed, even promising ventures like Reko Diq remain at risk.
General Munir’s reassurances about enhanced security, especially in volatile Balochistan, were aimed at countering investor fears. Yet the reality on the ground is far more complex. The rise in militant activity, particularly from groups emboldened by a disengaged Afghan Taliban, casts a long shadow over any investment prospects in the region. A secure investment climate cannot be established through rhetoric alone—it requires a functional justice system, local stakeholder buy-in, and sustained state presence.
Additionally, despite numerous MoUs signed during the forum, the lack of disclosed investment figures raises doubts about the actual scale and depth of investor commitment. MoUs are, at best, expressions of intent; turning them into legally binding contracts requires institutional discipline, political stability, and economic predictability—conditions that remain in short supply.
Pakistan’s macroeconomic environment remains hostile to serious investment. The country continues to grapple with anemic growth and a gaping revenue shortfall—703 billion rupees below target, as acknowledged by the Federal Board of Revenue (FBR) for just the first eight months of the current fiscal year. This failure is partly due to the IMF-mandated contractionary fiscal and monetary policies, which, while aimed at stabilization, have crippled domestic demand and discouraged private sector activity.
Even existing foreign investors are unable to repatriate profits, largely due to a shortage of foreign exchange reserves—reserves which, worryingly, only reflect temporary rollovers from friendly nations, not organic economic recovery. Until investors are assured that they can access and transfer their capital freely, new projects will remain mired in uncertainty.
Meanwhile, despite a halving of the policy rate since last year and declining inflation, real economic relief remains elusive. The cost of borrowing remains uncompetitive compared to regional peers, and wages—frozen for most private sector employees since 2020—have failed to keep pace with living costs, contributing to a staggering poverty rate of 44%.
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Compounding these issues is the government’s proposed tax policy under the next IMF agreement, which reportedly includes higher indirect taxes. These taxes disproportionately affect the poor and middle classes, further dampening consumer confidence and reducing disposable income. It’s a move that signals short-term compliance with external lenders at the expense of long-term, inclusive growth.
If Pakistan wants to become a serious destination for foreign direct investment, it must broaden its tax base equitably, ensure transparency in public finance, and stop resorting to regressive taxation as a crutch for weak fiscal management.
The forum may have generated headlines and optimistic soundbites, but Pakistan’s historical failure to implement agreements is what foreign investors remember most. Time and again, Pakistan has celebrated new initiatives only for them to fall apart due to bureaucracy, political instability, or legal disputes. Investors will remain cautious unless these issues are addressed head-on—not just at high-level forums, but through enforceable reform.
The disconnect between policy promises and actual delivery is a chronic issue. It is not enough to secure investment pledges; Pakistan must also improve institutional accountability, ensure legal protections, and establish an environment where both local and foreign investors can trust that their rights will be protected over the long term.
The Pakistan Minerals Investment Forum has served its purpose as a symbolic reset—an attempt to reframe Pakistan as a viable destination for global capital. But symbolism will not move billions in investment. Without robust regulatory reforms, institutional continuity, transparent contract execution, and security guarantees grounded in reality, no amount of natural wealth will translate into sustainable development.
It’s encouraging to see the military and civilian leadership working in tandem to attract investment, but the hard work lies ahead. Reforms must be institutionalized, not personalized. Contractual integrity must outlast political cycles. And above all, the rule of law—not just state assurances—must be the foundation upon which Pakistan rebuilds investor confidence.
Until then, Reko Diq may remain the exception, not the rule. And the mineral wealth buried beneath Balochistan’s soil may continue to be more of a potential than a reality.
