The All Pakistan Business Forum (APBF) has raised its serious concern over the falling trend of foreign direct investment (FDI) into the country, which has plunged by over 58% during the first two months of the new fiscal year of 2019-20.
APBF President Syed Maaz Mahmood said in a statement that despite significant improvements in the energy infrastructure and security condition, the government has failed to attract investment in the country. He said the drastic steps and political will can revive the economy, which should be grown significantly and constantly for visible impact, as the total FDI during the July-August period fell to $156.7 million from $377 million in the same period last year. On a month-on-month basis, the FDI inflows in August declined by a massive 57.8% to $83.4 million from $198 million in August 2018. He advocated the need for raising the country’s tax base so that tax-to-GDP ratio improves from current poor level.
The SBP data shows that slowdown of inflows from China have brought down the overall FDI figure, as inflows from Beijing during July-August fell to $28.9 million compared to $216 million whereas inflows during August clocked in at $33.4 million. United Kingdom emerged as the second leading investor in the country pouring $11.7 million, followed by UAE with $6 million and Malaysia $5.4 million. The oil and gas exploration sector remained the pick of foreign investors during July-August period with inflows of $21.3 million, followed by $16.4 million in transport, $14.9 million in electrical machinery and $15.3 million in textile in the textile sector. However, the data for Foreign Portfolio Investment (FPI) rose by a massive 182.8% to $107.3 million against an outflow of $129.6 million during the same period last year.
He urged the trade officers to explore opportunities to diversify exports of goods and services in their respective areas, asking them to meet the challenges faced by Pakistan in European markets. He also suggested the ministry to devise strategies for promotion of Pakistani products, calling upon trade officers to take advantage of opportunities offered by China-Pakistan Economic Corridor (CPEC).
Maaz Mahmood said that the weak FDI data is a massive setback to the government as it is currently undergoing a $6 billion reform program led by the International Monetary Fund to avoid a balance of payments crisis. He said that the government has taken several measures to curb imports but has failed to increase exports despite massive depreciation of the local currency.—INP