Pakistan advances Special Economic Zones under IMF-guided constraints
Pakistan is accelerating the development of its Special Economic Zones (SEZs) to capitalize on existing commitments while navigating recent International Monetary Fund (IMF) restrictions. The country’s Board of Investment (BoI) has signaled a renewed push to move projects forward that were initiated before the IMF’s Extended Fund Facility (EFF) restricted new SEZs in 2024. The key objective is to sustain foreign investment, stimulate industrial growth, and maximize the value of zones already legally protected under the SEZ Act of 2012.
IMF restrictions shape the current SEZ roadmap
Under the EFF approved on September 25, 2024, Pakistan is restricted from establishing new SEZs unless they fall within prior international obligations or have explicit approval from the relevant SEZ authority. This has created a tight window for development, prompting the BoI and allied agencies to prioritize projects with existing legal protections while seeking timely approvals through the Board of Approvals (BoA).
Several SEZs linked to international commitments remain in the pipeline:
– Mohmand SEZ
– Karachi Industrial Park
– Federal SEZ in Islamabad (an initiative under the Pak-China Joint Cooperation Committee of CPEC, 2016)
– Gabd-Rimdan Border SEZ (under a 2024 memorandum of understanding with Iran)
To keep momentum, Letters of Intent are being issued to identify development partners and fast-track submissions under the applicable rules. This approach aims to leverage whatever flexibility remains within the IMF framework while ensuring compliance with statutory requirements.
Regional and cross-border potential: Gilgit-Baltistan and Punjab
In Gilgit-Baltistan, the Moqpandas Export Processing Zone (EPZ) secured in-principle approval in January 2025. A Letter of Intent from BoI has enabled exploration of investment partnerships, with the application now resubmitted for final BoA clearance after completing formalities. If approved, it would add a strategic dimension to Pakistan’s northern export-oriented economy.
Private-sector SEZs across Punjab and Sindh are also progressing. Notable efforts include:
– United Business Park in Lahore (258.7 acres near Raiwind)
– Capital SEZ in Chakwal
Both projects have benefited from adjusted per-acre land costs following recommendations from SEZA Punjab, reflecting an aim to attract affordable investment. In Lahore, the Green Industrial Park (63 acres) has seen land pricing reduced from Rs 150 million to Rs 120 million per acre, a move designed to improve feasibility for prospective tenants.
Sindh and established zones: continuity and cost relief
Sindh hosts the Oborcon Industrial Zone in Thatta (300 acres), which has been resubmitted for BoA consideration after addressing prior observations. Meanwhile, established SEZs like Bin Qasim Industrial Park in Karachi continue to operate under 60-year lease terms, providing a proven framework for investors wary of policy shifts during IMF oversight.
To further streamline investment, the Pakistan Industrial Development Corporation (PIDC) has proposed a recurring land-lease model — up to 50 years at $10,000 per acre per year — intended to reduce upfront costs and enhance long-term viability for developers and tenants alike.
Coordinated policy, cross-ministerial collaboration
New qualification criteria are being jointly formulated by the BoI, Special Investment Facilitation Council (SIFC), Ministry of Industries and Production, SEZA Sindh, and PIDC. This collaborative approach seeks to harmonize regulatory standards, speed up approvals, and align SEZ incentives with Pakistan’s broader industrial development goals and foreign investment targets.
Strategic timing within IMF commitments
The current drive to implement pre-approved SEZs reflects Pakistan’s need to maximize investment opportunities within the limited window provided by IMF commitments. By advancing zones with established legal footing and carefully managing new proposals, Pakistan aims to sustain growth in manufacturing, exports, job creation, and regional integration while maintaining compliance with international financial arrangements.
Conclusion
Pakistan’s SEZ push demonstrates a pragmatic embrace of industrial policy under IMF constraints. With a mix of cross-border projects, regional development plans, and cost-relief measures, the country intends to attract investment, diversify its economy, and strengthen its role in regional trade networks—such as the China-Pakistan Economic Corridor—without compromising its financial commitments.
