- Who’s responsible?
That October saw FDI (Foreign Direct Investment) fall 55pc year-on-year ought to rattle some nerves in Islamabad. This, no matter what PTI stalwarts say, is not because of anything the previous government did. Rather, it seems foreign investors are far more jittery than the finance ministry would have us believe; or, perhaps more troublingly, believe it themselves. The trend is hardly surprising considering the situation on the ground. At a time when even local investors would rather take their money to other countries, why on earth would outsiders beeline to our investment bureau?
This ought to have seriously troubled the prime minister. How long, after all, can he go from country to country asking for emergency reserves just so our economy can stay solvent? And since there’ll be some time before our tax or export earnings make significant contribution to the kitty, foreign investment is as good a bet as any to keep the economy moving. A very good example comes from Turkey, where President Erdogan made his mark by creating an environment in which hot money could circulate and lift the real economy. PTI attached much premium to attracting FDI, which naturally led to a perception of an investor friendly policy waiting to be implemented.
The days since the election victory, alas, have not helped the market much. From the uncertainty about the bailout, to more uncertainty about the Chinese contribution, etc, to reduced investor confidence, Pakistan’s economy will just not survive if things do not change quickly. As Imran Khan has reminded the nation repeatedly, the government was staring a very real possibility of default right in the face when it took over. And now though it gives the impression of cushioning the immediate blow, numbers just do not seem to support its claims. There is an urgent need to revive confidence in the economy. The government should have realised by now that just saying the right things does little intrinsic good. It must, therefore, fashion policies that are in keeping with our economic situation.
