DOES INCREASE IN FDI TO PAKISTAN MAKE IT A BETTER COUNTRY FOR INVESTMENT?

Pakistan has seen an increase in FDI (Foreign Direct Investment) especially in the wake of the $57 billion CPEC project. FDI increased by 5% to $2.41 billion in fiscal year 2016-17 as compared to $2.30 billion in the previous year. The power sector was the biggest recipient of FDI with $795 million in Fiscal Year 2017.

China leads with a 49% share contributing $1.185b followed by Netherlands and Turkey who contributed $463m and $136m respectively. Main sectors for investment remain to be infrastructure, power and trade.

The question arises that despite a hike in foreign investment what is holding Pakistan to become a nation of trust for businesses and companies abroad? According to Sajid Amin, research fellow, head policy solutions lab, Sustainable Development Policy institute, FDI could be divided into two types; efficient and strategic. Efficient FDI depends on ease of doing business, tax structure and technically skilled workforce.

Strategic FDI is based on geographical and political interests. Pakistan, mostly is a recipient of strategic FDI which is not sensitive to market situation. Majority of the FDI coming to Pakistan is infrastructure based. Infrastructure in itself is a tool and mechanism and depends on human capital for furthering.  Mr. Amin also stated, ‘Pakistan is way below the bare minimum threshold in terms of skilled workforce.

Read More…

Be the first to comment

Leave a Reply

Your email address will not be published.


*


Enter Captcha Here : *

Reload Image