Positive signs for Pakistan’s economy, even as the security situation continues to be a challenge. Last month, IMF reported that, some obstacles such as energy and security notwithstanding, Pakistan’s economy looks like it is set to improve. More good news is reported today by Dawn about an economic area that has been worrisome in the past – foreign direct investment.
Pakistan aims to attract foreign investment worth five billion dollars this year, but needs to tackle reform, maximise anaemic growth and stem rampant violence to clinch its ambitious target.
Last fiscal year, Pakistan recorded its worst economic growth in more than a decade, at two per cent, and attracted only 3.7 billion dollars in investment.
Yet Board of Investment chairman Saleem Mandviwalla is optimistic despite Pakistan’s immense challenges.
“Traditionally the investment pace that we had kept — which was an average of five billion dollars a year — I think we should be able to go back to it very soon depending on if the global situation improves,” he told AFP.
The primary obstacle to our economic improvement should be no surprise – it is defeating the jihadi militants that threaten safety and security, and ensuring that the world recognizes that our political forces respect the democratic process and are not going to make any coups. No companies or investors will want to put their money into Pakistan if they think it is too big a risk of insecurity.
Azmat Ranjha, the minister for trade in the Pakistani embassy in Washington, acknowledged that investment from the United States — the country’s largest trading partner — had slipped because of the security concerns.
Getting security under control will be priority number one if we are going to meet this goal, but it is good to see that Board of Investment is making an aggressive move to improve the economy, even during the difficult times. There is no attitude of giving up or asking of handouts. Rather, there is an attitude that only through intelligent marketing of Pakistan as a good investment for foreign countries will we see continued improvements. Already this is paying off.
“We have to market Pakistan, we have to overcome the local issues,” Mandviwalla said, highlighting opportunities in energy generation, agriculture and infrastructure.
The top three countries providing foreign direct investment (FDI) so far this fiscal year are the United States, with 347.5 million dollars, Britain, 119 million dollars and the United Arab Emirates, 121.8 million dollars, according to the Board of Investment.
The biggest investments flowed into oil and gas, communications and information technology, and power generation, its documents said.
The investment board touts success stories such as investment from mobile phone operators Orascom (Egypt) and Telenor (Norway), Japan’s Toyota, Citibank, Standard Chartered Bank and consumer product giant Procter & Gamble.
The board recently signed a memorandum of understanding with General Electric to identify energy, power, transport and water projects.
These are positive signs, and give hope for economic improvements over the year.