Analysts dub it a show of an absolute mismanagement by the country’s economic managers, as net flow of foreign investment in Pakistan nosedived by 59 per cent during first five months of current fiscal year, July-Nov FY12. State Bank of Pakistan Thursday reported that net flow of foreign investment witnessed an accumulative drop of $443.4 million and shrank to $305.3 million from $748.7 million of the corresponding period in FY11. During the review period, the foreign direct and portfolio investment in the country posted a respective decrease of 27 per cent or $156.3 million and 164 per cent or $290.7 million.
Foreign investment from
developed economies dropped by 62 per cent: A geographical account of foreign investment shows that investment from developed economies, including countries from European and North American regions, declined by 62 per cent or $265 million to $160.4 million as against $425.5 million invested during the same months last year. The investors from developing economic of Asia and African regions also remained in the red zone and reduced to $156.8 million during July-Nov FY12 from the previous $284.8 million. This depicts a slump of 45 per cent or $128 million in monetary terms.
Foreign Public investment increased by 77.6 per cent: Foreign Public Investment, however, set in the green zone and increased by 77.6 per cent from the negative $4.9 million to negative $1.1 million. Sector-wise data shows that economic groups including food, tobacco and cigarettes, chemicals, pharmaceuticals, cement, ceramics, basic metals, electrical machinery, transport equipment, power, trade, communications and financial business saw the offshore investors investing money as low as 51 per cent, 100 per cent, 87 per cent, 100 per cent, 99 per cent, 29 per cent, 40 per cent, 145 per cent, 108 per cent, 688 per cent, 176 per cent and 97 per cent, respectively.
Overall decline in economy: Analysts said this was the amount coming from those foreign companies which were already operating in Pakistan. “The portfolio investment is marginal,” said Asfar Bin Shahid, a senior economist. The analyst said the country’s corporate sector was not growing in tandem with the economy which was increasing demand and consumption in the country through creating employment and increasing exports. “This is because there is an overall decline in the economy,” A.B Shahid said.
The analyst appeared critical of government saying while the country was facing acute energy shortage economic managers had no solution in hand. “There is no focus on the part of government which, perceivably, is absolutely incapable of managing the economy,” the economist viewed.
