Traders (ICCI shows concerns over falling FDI and calls for urgent remedial measures)October 17, 2014
Islamabad: Islamabad Chamber of Commerce & Industry has shown great concerns over the falling trend of foreign direct invest (FDI) in the country, which has declined by 26 percent during the first quarter of this financial year and called upon the government to take urgent measures to improve inflows of FDI.
Muzzamil Hussain Sabri, President, Islamabad Chamber of Commerce & Industry said that Pakistan received FDI of just $ 169 million during July to September 2014, which was highly disappointing. This has happened despite the fact that many sectors of Pakistan’s economy including energy, infrastructure development, agriculture, oil & gas, mineral etc. offered huge investment opportunities, but the government could not evolve a better strategy to attract potential investors due to which the FDI was diverting to regional countries.
He said as per World Bank Report 2013, China achieved net FDI inflows of 3.8% of its GDP, India 1.5%, Bandladesh 1.2%, Sri Lanka 1.4% while Pakistan managed to achieve net FDI inflows of just 0.6% of its GDP. The main reason behind the increasing inflows of FDI in these countries was good governance along with sound physical and institutional infrastructure.
He termed the lack of good governance, energy crisis, political turmoil, security challenges, inconsistency in policies and complicated business registration processes as the major factors that were discouraging FDI in Pakistan and stressed that government should take urgent measures to address these issues in order to attract FDI inflows.
Muzzamil Sabri urged that government should review the Investment Policy in consultation with all stakeholders including business community to address key issues and encourage higher local and foreign investment in the country.
The government should facilitate the FDI in diversified sectors of the economy instead of focusing on a few sectors. He further said that government should bring reforms to build the confidence of investors and develop a fair taxation system, which was also proving a significant bottleneck in luring foreign investors.
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