The former Chairman of Pakistan Poultry Association (PPA) and former LCCI Senior Vice President Abdul Basit expressed grave concern over eight per cent decline in Foreign Direct Investment (FDI) and Portfolio Investment during the financial year 2011 on Friday. In a statement, Abdul Basit said that according to the State Bank of Pakistan, out of the total investment, FDI stood at $1.573 billion at the end of FY11 as compared to $2.15 billion in FY10, depicting a decrease of $577 million.
He said that it was astonishing that even those countries are reluctant to invest in Pakistan who pushed Pakistan in to the war against terrorism. He added that in the financial year 2009-10 the volume of US investment in Pakistan was $468.3 million but in the financial year 2010-11 it declined to $238.9 million. Similarly, in the same period UK’s investment has also declined from $294.6 million to $208.1 million. He said that many other countries are also reducing their investment in Pakistan. While citing an example he said that Japan’s investment in Pakistan has reduced from $26.8 million to $3.2 million, Switzerland’s investment has reduced from $170.6 million to $47.2 million and German investment has reduced from $53 million to $21.2 million from FY10 to FY11. He said that overall there has been a decrease of 26.8 per cent in the Foreign Direct Investment (FDI).
He said that the ongoing energy crisis and worsening law and order situation are the main factors contributing to the decrease of investment in the country spoiling. He added that unstable economic policies, poor infrastructure situation and high input cost are equally responsible.
He also added that that the government needs to reset its priorities. The government’s focus on political issues has resulted in slow economic growth. “Attracting foreign investment and encouraging local investors through lucrative investment policies are the prime tasks of the government but it was very unfortunate that during the year 2011 no such policy was announced by the government.”, he said. “Had the government been able to come up with any such policy in consultation with business community in the beginning of the year 2011, the situation would have been much better today.”
Basit said that to attract new foreign investment the government should not only motivate the commercial section of Pakistani missions abroad but it should also give incentives to the Large Scale Manufacturing sector that has the ability to initiate joint ventures with its counterparts in foreign countries. He added that in the present scenario the local industries are in deep troubles due to load-shedding of electricity and gas. He urged the government to prepare a comprehensive plan with the consultation of business community to solve these issues and attract Foreign Direct.
