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Foreign direct investment continues to be the weak link in Pakistan’s economy. Regardless of the rise FDI has seen in February, foreign direct investment has continued to fall in 8MFY24.

Net FDI in February 2024 depicted a growth of 15.7 percent year-on-year o $130 million as per the latest data released by the State Bank of Pakistan. Inflows of FDI during the month were up by 16.25 percent year-on-year, while outflows were also up by 17.8 percent year-on-year.

Overall, net FDI in 8MFY24 fell by 17 percent year-on-year, where outflows for the period were almost half of the total FDI inflows in 8MFY24. During the period, Hong Kong took the lead with the highest FDI in the country, accounting for a 56 percent year-on-year growth and a share of almost 30 percent in total FDI for 8MFY24. China witnessed a significant decline of over 80 percent year-on-year in net FDI to Pakistan. Together China and Hong Kong make up the largest share of FDI in the country.

The contribution to FDI from a sector perspective remained unchanged and unraveled with the power sector leading the pack followed by oil and gas exploration and the financial business sector.

In all honesty, SIFC’s efforts so far alone cannot fix the economic challenge in the country. The Special Investment Facilitation Council has been actively inking agreements with various governments while opening doors of the country to global investors. However, under the SIFC umbrella, major changes and efforts will be required to attract the much-needed foreign investment. First and foremost, structural reforms must be undertaken to ease the cost of doing business in the country by reducing bureaucratic hurdles and introducing incentive schemes to attract investment, A related effort would bathe digitalization and automation to streamline processes and increase tax revenues while converting the non-regulated sector to regulated sectors.

Comments

200 characters
KU Mar 21, 2024 11:25am
Instead of riding the SIFC horse to a destination, they are carrying it to the destination, how wrong can it get? Industry and agriculture are shutdown or in decline, yet they cannot see the truth.
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test Mar 21, 2024 12:43pm
FDI (Foreign Direct Investment) ? After what Pakistani elite class did to CPEC will any country ever be interested in investing in Pakistan ? Think of it logically and answer is in the question itself
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test Mar 21, 2024 12:46pm
Forget about FDI and SIFC. Focus more on bringing Chinese investment. Startup CPEC again by giving assurances to China in the form of military bases air bases naval bases. Be a big market for Chinese.
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test Mar 21, 2024 12:48pm
The only country which has invested so much in Pakistan is China There was and there will never be a country as important to Pakistan as China But the elite class want to keep begging for IMF dollars.
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Fayaz Mar 21, 2024 06:44pm
SIFC aim was to decrease the bureacratic hurdle yt it increases by adding new one to it! Either we are considering the world as stupid and bogus as we?
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HashBrown® Mar 23, 2024 09:56am
@Fayaz , As far as I can tell, the SIFC and the bureaucracy are two sides of the same coin, aka the establishment. One won't ever consider limiting the other, so our overpaid babus are safe for now.
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Mubashir Munir Mar 23, 2024 03:18pm
We should give advantage to our local investors and give them incentives and to our own people who are residents of overseas. We should give incentives to our own people
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