Pakistan’s economic reforms and investor-friendly policies, supported by the SIFC, aim to attract investment across key sectors, while its strategic location, rich resources, and growing global interest position it as a rising geo-economic and geopolitical player.
Key Points:
- Pakistan’s ongoing macroeconomic stabilization (IMF program, tax reforms, tariff rationalization and market-based exchange rates) signals Pakistan’s commitment to a liberalized and investor-friendly economic model.
- The Special Investment Facilitation Council (SIFC) is streamlining investment procedures across sectors, especially mining, energy, agriculture, and IT—offering a secure and fast-track investment platform with military-civilian coordination.
- From untapped mineral wealth (e.g., Reko Diq, lithium) to a youthful population and record remittances, Pakistan offers a rare mix of resource richness and labor-driven market expansion.
- Pakistan’s location at the confluence of South Asia, Central Asia and the Middle East positions it as a vital node for global trade and connectivity—anchored by Gwadar Port and the China-Pakistan Economic Corridor (CPEC).
- Amid global realignments, Pakistan is attracting renewed strategic interest from powers like China, Saudi Arabia, Russia and the U.S.—underscoring its evolving importance as both a geopolitical actor and a geo-economic opportunity.
Pakistan sits at a crossroads of Asia and the Middle East – a youthful nation of over 240 million people with a median age under 23 (imf.orgcia.gov). Its strategic geography – from the Karakoram Highway linking China, to the deep-water port at Gwadar on the Arabian Sea – gives it outsized importance in today’s multipolar world. China’s Belt & Road flagship, the China-Pakistan Economic Corridor (CPEC), underscores this point: it’s now valued at some $62 billion (nearly one-fifth of Pakistan’s GDP) in roads, power plants and infrastructure (mei.edu). At CPEC’s terminus, Gwadar Port was revamped and declared fully operational in 2021; Pakistani officials call it the corridor’s “crown jewel” (mei.edu). So far CPEC has delivered real impact – it has funded new highways, power plants and energy pipelines that alleviate chronic shortages. As former Prime Minister Nawaz Sharif noted, CPEC has been a “game changer” credited with improving infrastructure, mitigating power cuts, and creating tens of thousands of jobs (mei.edu).
Yet much of Pakistan’s promise remains untapped. The World Bank now projects GDP growth of about 2.7% for FY2025 (up from 2.5% the year before) (arabnews.pk) , a sign that stabilization efforts are working. Inflation has plunged (from above 20% in 2023 to roughly 1.5% by early 2025 (arabnews.pk), allowing the central bank to cut rates. Authorities are in talks with the IMF on a new program to cement fiscal discipline, targeting a primary surplus and medium-term inflation goals (reuters.comarabnews.pk). At the same time, Pakistan faces hefty external obligations (arabnews.pk), which in turn are prompting officials to press ahead with structural reforms. The World Bank has highlighted reforms – from a market-driven exchange rate to lower tariffs and a better tax system – that “would signal strong reform commitment…build confidence and attract investment” (arabnews.pk). In short, macro stability is returning and policymakers have publicly recommitted to broad economic reforms.
Mega-Projects and Connectivity
Beyond macro stabilization, Pakistan is pushing major infrastructure initiatives. Chief among these is CPEC, but other projects – energy pipelines, highways and ports – also figure in the strategy. For investors, one key development is the Special Investment Facilitation Council (SIFC). Launched in 2021, SIFC is a high-level civil-military body that reports directly to the Prime Minister, designed as a “one-stop shop” for investors (dawn.com). In practice, SIFC brings provincial and federal agencies under one roof to cut red tape and accelerate approvals. As the SIFC Secretary explained, it “facilitate[s] investors, boost[s] their confidence and provide[s] a conducive business environment” (dawn.com). The council has already held road shows and hosted foreign delegations to market Pakistan’s opportunities.
On the energy front, Pakistan is deepening ties with partners like Saudi Arabia and the UAE. For example, Saudi Aramco agreed to buy a 40% stake in a Pakistani oil distributor and back in 2019, signed a $10 billion deal to build a refinery (plus $1 billion for a petrochemical plant) at Gwadar (arabnews.com). Such projects aim to turn Gwadar into a regional energy and industrial hub. Meanwhile, at an April 2025 minerals summit in Islamabad, U.S. officials explicitly invited American mining firms, noting that Pakistan’s “vast mineral potential – if responsibly and transparently developed – can benefit both our countries.” (arabnews.com). In short, strategic partners from China to the U.S. and Gulf states are treating Pakistan as a partner for infrastructure and resource projects, reflecting its geostrategic value.
Untapped Investment Opportunities
Pakistan’s economy hosts several underdeveloped sectors that could pay dividends if unlocked. Key examples include:
- Minerals: Pakistan is rich in copper, gold, lithium and other resources but mining contributes only about 3.2% of GDP (arabnews.com). One massive copper-gold zone (Reko Diq in Balochistan) has ore reserves in the billions of tons. International firms see it as “one of the world’s largest underdeveloped copper-gold areas,” and its development could transform the economy (arabnews.com). Washington’s recent outreach to investors explicitly cites this mineral wealth as a strategic asset (arabnews.com).
- Energy & Industrial Complexes: Apart from Gwadar, Pakistan is pursuing infrastructure like pipelines and processing plants. The Saudi-backed refinery and petrochemical project in Gwadar (part of that 2019 package) is slated to tap regional energy flows. Other international deals (for example, a planned Pakistan-Iran gas pipeline and Central Asian energy links) could further integrate Pakistan into Eurasian energy networks. In essence, energy investors are eyeing Pakistan not just as a market but as a corridor.
- Manufacturing & Diversification: Pakistan is one of the world’s leading textile producers, but local industry leaders say the country must diversify beyond textiles and basic agriculture. A Western CEO in Pakistan urged that “more investments from overseas are desperately needed…to broaden the industry base in different sectors and not rely only on textiles or agriculture” (dawn.com). This means opportunities in value-added manufacturing (e.g. automotive parts, pharmaceuticals, electronics) if infrastructure and workforce skills can be improved.
- Technology & Services: Pakistan’s young, English-speaking population is already spawning a budding IT services and fintech sector. E-commerce and digital payments are growing rapidly in Pakistani cities. While sources are scarcer here, the World Bank has noted Pakistan’s push for a “Digital Pakistan” in sectors like telecom and online finance (arabnews.pk). In a region where digital transformation is a priority, Pakistan could leverage its tech talent for regional service exports.
In each case, Pakistan’s advantage is a combination of untapped resources and strategic positioning. Its ports and highways are progressively linking Central Asia’s markets (via Afghanistan) and the Middle East’s, which could eventually lower transportation costs for exporters. The key obstacle has been security and bureaucracy, but if those can be managed, the upside is substantial.
Demographics and Human Capital
An enormous, young workforce is another trump card. Pakistan’s population is now over 240 million (imf.org), making it the world’s fifth-largest country by people. With a median age around 23 (imf.orgcia.gov), the country has one of the youngest populations globally. This means a large labor pool – a potential demographic dividend if harnessed with education and jobs. It also means a rapidly growing domestic market: Pakistani consumers are millions strong and rising incomes are fueling demand in sectors from retail to mobile services.
Supporting this, Pakistan’s vast overseas diaspora continues to underwrite the economy. In FY2024/25, remittances hit a record $31.2 billion (first 10 months), up nearly 31% year-on-year (arabnews.com). Saudi Arabia, the UAE, Europe and North America are major sources. These inflows have bolstered foreign reserves and domestic demand. They also signal confidence: as Prime Minister noted, record remittances reflect “the confidence of overseas Pakistanis in government policies” (arabnews.com). For global investors, this means Pakistan is not starving for dollars – its people are pumping money in to support growth.
Why Now: A Pivotal Moment
Pakistan combines critical strengths at a moment of global flux. Its economy is stabilizing (World Bank growth up to 2.7% FY2025 (arabnews.pk), and inflation is under control. Major projects like CPEC have laid down new infrastructure that will keep lowering business costs. High-level reforms (led by SIFC and others) are explicitly designed to ease doing business (dawn.comarabnews.pk). Meanwhile, secular trends – a young labor force, rising remittances, and integrated South Asian and Central Asian markets – are moving in Pakistan’s favor. Indeed, both China and the West are talking openly about Pakistan’s role. U.S. officials, for example, now stress Pakistan’s “vast mineral potential…if responsibly developed” as a mutual strategic interest (arabnews.com).
For policy-makers and investors scanning a changing world, key reasons to engage now include:
- Macro Stability and Growth: Pakistan is coming off a crisis and growing again. With growth near 2.7% and inflation at multi-year lows (arabnews.pkarabnews.pk), the economy is more predictable than a year ago.
- Strategic Infrastructure: Billions have been injected into new roads, power plants and ports. The CPEC corridor (roads, energy lines and Gwadar Port) has already eased power shortages and created jobs (mei.edu), unlocking long-term productivity.
- Untapped Resources: Pakistan’s vast mineral and energy resources (from copper and gold to oil and gas) are largely undeveloped (arabnews.com). International majors are signaling interest, from Barrick Gold at Reko Diq to Aramco’s Gwadar projects (arabnews.com).
- Demographic Edge: A population of 240M (median age ~23) means cheap labor and a growing consumer base (imf.orgcia.gov). Record remittance inflows ($31B, FY2025) show confidence in the market (arabnews.com).
- Improving Business Climate: The new SIFC one-stop council and announced reforms (tax, exchange rate, tariff cuts) send a message of commitment (dawn.comarabnews.pk). Recent commitments to streamline approvals directly address long-standing bottlenecks.
In short, Pakistan today is a golden sparrow – underappreciated relative to its assets. Its strategic location linking China, Central Asia and the Middle East; its young workforce; and a queue of international partners (China, the U.S., Gulf states, even Russia) make it a unique opportunity. As global power centers shift and new supply chains form, overlooking Pakistan could mean missing out on one of the last truly undervalued frontiers. For investors, decision makers and policy analysts alike, the time to act is now: Pakistan’s potential is rising at a critical moment when the world is looking for new anchors in Asia.
* Dr. Muhammad Jahanzaib is the Founder & Chief Visionary Officer (CVO) of Diamanium Thinkers, a global think tank. He holds a PhD in International Relations, specializing in the intersection of politics and economics in Pakistan’s foreign and domestic policy. A double gold medalist and published scholar, he writes on economic intelligence, economic diplomacy, political economy, AI, and regional cooperation in South Asia and beyond. He can be reached at jahanzaibdgc@gmail.com.
Key Citations
- Pakistan and the IMF Url: https://www.imf.org/en/Countries/PAK
- Median age Comparison – The World Factbook Url: https://www.cia.gov/the-world-factbook/field/median-age/country-comparison/
- “Gwadar is the future”: China and Pakistan’s troubled strategic port on the Arabian Sea | Middle
- East Institute Url: https://mei.edu/publications/gwadar-future-china-and-pakistans-troubled-strategic-port-arabian-sea
- World Bank projects 2.7 percent growth for Pakistan in FY2025 | Arab News PK Url: https://www.arabnews.pk/node/2598224/pakistan
- IMF says next Pakistan funding review expected in second half of 2025 | Reuters Url: https://www.reuters.com/world/asia-pacific/imf-says-next-pakistan-funding-review-expected-second-half-2025-2025-05-23/
- SIFC termed one-stop shop for investors in Pakistan – Newspaper – DAWN.COM Url: https://www.dawn.com/news/1887327
- Pakistan approves petrol, diesel supply deal between Aramco, GO Petroleum | Arab News Url: https://www.arabnews.com/node/2514501/business-economy
- US seeks investment in Pakistan’s vast mineral reserves during top official’s visit | Arab News Url: https://www.arabnews.com/node/2596503/pakistan
- Pakistan’s remittances hit record $31.2 billion in current fiscal year, led by Saudi inflows | Arab News Url: https://www.arabnews.com/node/2600122/pakistan