FDI during July-January 2011-12: power and other sectors witness steep decline

The Ministry of Finance has reportedly informed the Economic Co-ordination Committee (ECC) of the Cabinet that Foreign Direct Investment (FDI) has declined by 128 percent in the power sector and 72 percent in financial sector during July-January 2011-12 over the same period of last year, it was reliably learnt.
An official of the Finance Ministry reportedly revealed during a briefing on key economic indicators to the ECC, presided over by Finance Minister Dr Abdul Hafeez Sheikh that FDI witnessed a steep decline in financial sector and communication by 72% and 356 % respectively during the period under review.
The textile and oil and gas exploration have been the only two sectors of the economy that witnessed a marginal increase in FDI during the period under review compared to the same period of last year.
An official said that decline in FDI was mainly due to unstable security situation in the country, global recession, high cost of doing business, and energy crisis that continue to be a source of serious concern for the economic managers.
An official quoted Secretary Finance Dr Abdul Wajid Rana as stating that FDI in financial business declined from US $160.9 million in July-January 2010-11 to US $ 44.9 million in July-January 2011-12; whereas FDI in the power sector declined from US $113.6 million during first seven months of last year to negative US $31.3 million in July-January 2011-12. The situation was even worse in the communication sector in which the government is planning to mobilise US $800 million from auction of 3-G license in the current fiscal year.
The Finance Ministry reportedly informed the ECC that the country received US $45.1 million FDI in communication sector during July-January 2010-11 which declined to negative 115.6 million during July-January 2011-12.
FDI in textile sector marginally increased from US $13.5 million July-January 2010-11 to $20.4 million in July-January 2011-12 and in oil and gas exploration from $295 million to $361.6 million during the period under review.
The ECC was informed that foreign private investment declined by 66 per cent to $445 million on July-January 2011-12 from US $1.306 billion during July-January 2010-11 and portfolio investment declined by 149 per cent.
The portfolio investment was $304 million in July-January 2010-11 and declined to negative US $149 million in July-January 2011-12.