All Pakistan Business Forum (APBF) President Ibrahim Qureshi on Monday said that increase in Foreign Direct Investment (FDI) in FY17 reflects the improvement in security situation, implying that investors had started coming back to Pakistan, as the country has attracted FDI of $ 2.4 billion, up by 4.6 percent during 2016-17.
“According to State Bank of Pakistan (SBP), after a very long time FDI has shown an upward trend and rose by 4.6 percent during last fiscal year,” he said.
“The country fetched $2.41 FDI during July-June of FY17 compared to $2.305 billion in the same period of last fiscal year, depicting an increase of $105.6 million. During the period, FDI inflows were less than FY16, however lower outflowing posted some increase in the overall FDI. Net FDI inflows stood at $2.813 billion against the outflow of $403 million in FY17,” he said.
Ibrahim Qureshi said, “The country’s liberal policies of investment offered one of the most attractive investment regimes in the region. Pakistan’s trade with European Union has also increased substantively after the grant of GSP+ status to Pakistan.”
APBF president appreciated the government’s resolve to meet the challenges faced by Pakistan in European markets vigorously, suggesting it should devise strategies to promote Pakistani products. He called upon the trade officers to take advantage of opportunities offered by the China-Pakistan Economic Corridor (CPEC) and growth in Pakistan’s national economy made possible by the strengthening of democratic institutions and improvement of the security situation in Pakistan.
Quoting the figures of Central Bank, he said, “China topped the contributors to FDI as its investment accounted for about 50 percent. Major inflows were received from Netherlands, Turkey, France and UK during July-June of FY17. China's total investment in Pakistan stood at $1.23 billion, including $1.186 billion FDI and $48.4 billion Foreign Portfolio Investment (FPI) during FY17.”
Ibrahim Qureshi said, “Despite some increase in foreign investment, the FDI inflows were not sufficient to fully offset the widening in the current account gap. As a result, the country's liquid foreign exchange reserves declined over $ 1.7 billion during FY17. According to SBP during the period, portfolio investment witnessed downward trend and declined by 66 percent.”
He said, “Only political will and drastic steps can revive the economy, which should have grown significantly and constantly for visible impact.” He advocated the need for raising the country's tax base so that tax-to-GDP ratio improves from current 9 percent.
“Besides governance challenges, adverse security perception, political instability and the foreign trade offices role is also vital for the continuity of enhancement in foreign investment,” he concluded.
