Foreign investment increased by 133.3 percent in first 10 months (July-April 2014) of current fiscal year, compared to the same period last year on account of foreign public investment in debt securities comprising special US dollar bonds Eurobonds, FEBC, DBC, T-bills and PIBs, the Pakistan Economic Survey 2013-14 revealed on Monday.
Workers' remittances flows are usually the second largest source after Foreign Direct Investment (FDI). In case of Pakistan, in first ten months of 2013-14, FDI stood at $750.9 million while workers' remittance was $12,895 million hence in the recent years, the remittances have become more important in terms of external funding for Pakistan.
Foreign investment has reached at $2979 million during first ten months (July-April 2014) of current fiscal year as compared to $1277 million showing 133.3 percent higher of last year, the survey states. Foreign private investment witnessed a decline of 15 percent mainly emanating from FDI which reduced by 12.9 percent. Inflow of FDI was $1604 million during first ten months of current year.
Portfolio investment in equity securities, however witnessed a rise of 27.8 percent. Out of total foreign investment, the FDI has reached at $750.9 million. The major inflow of FDI is form US, Hong Kong, UK, Switzerland and UAE. Oil and gas exploration, financial business, power, communications and chemicals remained major recipient of foreign investment.
Sector-wise data shows oil and gas sector received the highest inflows of FDI ($412 million) followed by financial business ($199 million), power ($187.5 million), communication ($178.2 million) and chemicals ($116 million). Remittances remained a key source of external resource flows for developing countries. The consistent growth in remittances reflects a shift from informal to formal avenues to remit funds from overseas Pakistanis.
Like pervious year's performance, workers' remittances registered growth during July-April 2014, growing by 11.5 percent against 6.4 percent growth recorded in the corresponding period of last year. Despite the constant growth in remittances inflows, Pakistan stands lag behind when compared with some its neighbouring countries with huge exports of human capital like India, China, Bangladesh, etc.
The available data further suggests monthly average inflow if the remittances for the first ten months of current fiscal year stood at $1289.46 million compared $1156.98 million during the corresponding period last year. Remittances from Saudi Arabia recorded a substantial growth of 12.9 percent, UK 11.62 percent, USA 11.39 percent and UAE 9.12 percent during the period under review.
A greater share in remittances growth was that of oil rich gulf-region, Saudi Arabia, United Arab Emirates and other GCC countries. Most of the increase came from Saudi Arabia and UK. It was earlier feared that due to ongoing drive against illegal immigrants in Saudi Arabia, there could be some repatriation of Pakistanis from the Kingdom, and subsequently, a reduction in remittances.
However, due to government measures and negotiations from Saudi government, this did not happen while it is reported that over 50,000 Pakistani immigrants were sent back, around 800,000 documented and regularised as per the new requirements. The survey further stated that present government is taking various measures to export human capital and is under negotiations with other governments in this regard.
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