KARACHI:
Pakistan has failed to attract foreign investment due to several factors. The first thing that comes to mind is Reko Diq and how it was first scuttled and then the company took the Pakistani government to court for denying them a mining lease in 2011. The Supreme Court prevented the company from extracting coal stating that the agreement between the company and Pakistan was signed in 1993 and is not in line with Pakistan’s current laws. The sudden closure of the mine was declared illegal by the World Bank Group’s International Centre for Settlement of Investment Disputes. Pakistan was slapped with $6 billion worth of damages to the Tethyan Copper Company Pty Limited, which is around 2% of the country’s GDP.
The Resource Group (TRG) Pakistan is one of the largest IT companies in the country with over $100 million in exports and 8,000 employees. Companies like TRG are a boon because they bring much-needed foreign exchange through their exports. However, the company’s founder was forced to step down from his position after a scandal was revealed in the US Congress by a former employee. According to some sources, he had been trying to come back into TRG, but his attempts were thwarted by the company leadership as his actions did not allow for any association with TRG. He also filed a defamation lawsuit against TRG’s directors. Even though his actions have nothing to do with Pakistan, the case did not present a positive image of the country.
With such controversies surrounding a country with a fragile economic situation, the question that arises is: what sort of a message is being sent to overseas investors who want to invest in Pakistan. What signal is being sent to companies that bring in the much-needed foreign exchange to Pakistan through their work?
Murad Ali
Karachi
Published in The Express Tribune, March 29th, 2023.
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