Rising risk perception about investing into Pakistan is hitting hard the Foreign Direct Investment (FDI) that fell sharply in recent months and needs to be tackled through a comprehensive policy approach by involving the chambers of commerce in the country. In a statement issued here Tuesday, LCCI President Irfan Qaiser Sheikh said severest ever energy shortfall, bad law and order situation, institutional fragility and political instability were major factors keeping the foreign investors away. LCCI President feared that the fall in foreign direct investment was likely to adversely affect the country’s economic growth; therefore government should adopt remedial measures to reverse this trend and to attract foreign investment.
At the same time, LCCI President said, slow government response to deal with aggravating energy crisis was also spoiling not only the local investment scenario but also sending a very negative signal to potential foreign investors. Irfan Qaiser Sheikh said a special committee comprising members of the parliament, presidents of chambers of commerce and industry and representatives of association should be formed to identify solutions to attract foreign investment that is a prerequisite to economic growth.
LCCI President said the proposed committee should also be tasked to look into existing policy framework and if there is a need to redesign new policies it should immediately initiate work on them. Irfan Qaiser Sheikh said all the developed countries accord special importance to economic issues and challenges. But in Pakistan the situation is the other way round and the economy is on the bottom of government to-do list.
He said key issues including power shortage, poor infrastructure, law and order situation and other vital factors, should be addressed on priority basis to improve the bleak foreign investment condition to put the country on track of economic growth and development.
“At the same time the government should ensure that all institutions remain immune to any sort of undue interference as this will help improve quality of governance without which foreign investment can not be attracted.” LCCI President said that a number of sectors in Pakistan including infrastructure development, coal, energy, agriculture, livestock, textiles and pharmaceutical offer lucrative investment opportunities to foreign investors but unfortunately due to absence of a proper marketing strategy these opportunities are unattended even today.
It may be mentioned here that Pakistan’s investment rate was only 13.4 per cent at end of last fiscal year, which was lowest since FY74. The low saving rate, coupled with wary foreign investors led to record low investment rate in the country. State Bank had already reported in its annual report that Pakistan had fared poorly when compared to its neighbours in South Asia, because of domestic and global factors. However, SBP said it believed that the domestic issues are more decisive and chronic.