Filed on May 6, 2017 | Last updated on May 6, 2017 at 07.29 pm

Pakistan will shortly launch two international banks and a development fund - Exim Bank, Pakistan Infrastructure Bank and Pakistan Development Fund - to boost foreign trade and step up funding for its mega projects.

Pakistan Development Fund (PDF) aims at encouraging overseas Pakistan to invest their earnings at good profit rates.

On instruction of Prime Minister Nawaz Sharif Finance Minister Ishaq Dar discussed the launching of the two international banks and the PDF with top leadership of US, World Bank and the Iternational Monetary Fund (IMF) during his just concluded talks in Washington.

Islamabad is happy that its timing of the announcement of the two banks and the PDF has been welcomed by the IMF, which in its latest report put Pakistan's GDP growth at 5 per cent in FY-17, and projected it at 5.2 per cent for FY-18, well above the 3-4 per cent in the last decade. At the same time, its good to see the stock market indicating high foreign and domestic interest in investment. The stock market this month shot up beyond its highest position of 50,000 plus points which led to the international rating agencies to place it as Asia's Top-10.

The Pakistan Stock Exchange (PSX) with such an attractive performance is now on its way to be ranked as "G-20" - at the global best 20 stock markets, rating agencies say.

At the same time, according to international credit rating agencies, Pakistan is moving up and have upgraded Pakistan from "negative" to "stable," and just now to "positive."

Dar said: "Pakistan has now emerged as a lucrative investment option for international investors."

"I advise the multinational giants to consider Pakistan for establishing labour-intensive projects and facilities in South Asia," he said while talking to the Khaleej Times in Islamabad.

"The Exim Bank will be fully operational by December this year. It will start with a Rs7 billion cash," said Shibli Fraz, chairman of the Senate Standing Committee on Commerce.

He said, this information was provided by the Ministry of Commerce. The Ministry of Commerce also informed the Senate that it has sent three names to Finance Minister Ishaq Dar for the appointment of the head of the Exim Bank.

The government has also decided to launch Pakistan Infrastructure Bank (PIB), with a paid up capital of $1 billion. "PIB will be providing funds to the private investors for developing big projects," Dar said.

"The International Monetary Fund and the government of Pakistan will each hold 20 per cent stake in the PIB, and World Bank affiliate and lender to the private sector - International Finance Corporation (IFC) - will have the remaining 60 per cent shares," Dar said.

The government will launch PDF in collaboration with the Manila-based Asian Development Bank (ADB). The PDF shares worth Rs10 billion will be offered for investment expected to be made by the Pakistani diaspora. The PDF shares will be enlisted on the PSX.

"After success of Pakistan's sukuk bonds, PDF will be another attractive investment for the overseas Pakistanis to receive good dividends," Dar said.

The government will offer $1.3 billion shares to the overseas Pakistanis. It will be non-convertible dollar shares and will be invested in commercially viable projects in the public sector, Dar said.

He also said: "Since rupee is stable, we hope a positive response from investors. The rupee only registered a 5 per cent devaluation over the last five years, so if you invest in a good development fund you can get a good return," Dar said.

The ADB is also bullish over Pakistan's economic prospects and has upgraded the its growth estimate to 5.2 per cent in FY-17.

The advent of these three financial institutions will help Pakistan to expand its foreign trade, especially its sagging exports as the Exim Bank will provide sufficient export credits at a reasonable cost, while PIB will offer an opportunity to overseas Pakistanis to invest in long-term lucrative profit rate. The PDF will also help overseas and domestic Pakistanis in enlarging their savings and get good profit rates. The government at the same time will be relieved of quiet a bit from the burden of high-cost and hassle-free foreign loans.

The writer is based in Islamabad. Views expressed are his own and do not reflect the newspaper's policy.