Improved Business Environment

China’s annual report on Investment Security of Belt and Road Construction (2021) highlights research done on political, economic, social, cultural, and ecological investment security along the Belt and Road Initiative (BRI). Pakistan offers an important route in the entire BRI project through the China Pakistan Economic Corridor. According to the report, the country has reformed and simplified many previously cumbersome procedures. For example, the process of acquiring a No-Objection-Certificate, construction permit or any other license has been made relatively easy through a series of policy interventions in recent years.

The policy measures have increased Pakistan’s ranking on the ease of doing business index and improved the business environment in general. According to the Chinese agency, the measures introduced increased the amount of Foreign Direct Investment (FDI) received by Pakistan’s economy. In addition to policy measures, increasing economic security also boosted the business environment in the country. Economic security increased by 220% in comparison to the previous decade showing an upward growth trajectory. Moreover, Special Economic Zones and other CPEC related projects have greatly improved Pakistan’s business environment.

However, it is worth noting that an increasing marketisation of the domestic exchange rate has led to serious market fluctuations, devaluation of the currency to unprecedented levels, constant inflation, and an artificially increased interest rate are some of the factors that can cause a decline in the business environment of a country.