Foreign Direct Investment (FDI) appears to be in free fall, down over 14 pc. Even inflows from China, supposedly our great hope, are dragging.This is serious economic crisis as the FDI has been falling for years. During the previous cycle, FDI declined by 58 pc. That this negative trend is continuing even after the $46 billion CPEC agreement was signed is extremely worrying, especially since Chinese investments are also declining. All signs point to global investors seeing Pakistan as a risk not worth taking. The question we must be asking is why?
Sticking to his script, Imran Khan has blamed corruption, particularly referring to the Sharifs involvement in the Panama Papers scandal. However, the PTI chief may be half-right. Fears of corruption may be a factor, but it is not likely to be because of the Sharifs simply because they have faced corruption charges since long before coming to power in 2013. Any investors would have been able to factor the costs of doing business with the Sharifs. What is it then? It could be the Army.
Earlier this year, Gen Raheel removed six Army officers including 2 generals for corruption. This was actually not a surprise. Recently, Auditor General of Pakistan discovered billions being lost to corruption in the defence sector. Last year, 81 officers were found guilty of stealing billions more. Former COAS Gen Musharraf is well known to have billions in unaccounted for funds, and now his replacement former COAS Gen Kayani is finding his family embroiled in another corruption scandal along with other former senior military officers.
A corruption investigation has looked into senior retired officers, including relatives of the army’s former chief Ashfaq Parvez Kayani, who for many years was the most powerful figure in the country.
Also under examination are three former managers of the Defence Housing Authority (DHA), a wing of the army that builds developments to house senior retired officers and also makes enormous profits selling homes to civilians.
Army has usurped more and more power in the country. While carefully avoiding a coup, the military has been placing its own men in civilian positions, and working to seize control of CPEC, the most important economic project the country has even seen. Admitting this, how can we ignore the frightening possibility that growing unwillingness of global investors to do business in Pakistan is a direct reflection of their lack of faith in a state that is being controlled behind the scenes by the military establishment?
Army has expanded its reach into every corner of the state, and is now the single most powerful institution not only in national security but the economy also. As the saying goes, “with great power comes great responsibility”. If the Army wants the power to dictate the country’s terms, it has to take responsibility for the country’s failures.