Foreign investment to improve this year

Terrorism continues to hamper growth, says Investment Minister Saleem Mandviwalla.

LONDON: Foreign direct investment (FDI) in Pakistan could return to a positive trend this year, but militancy is a deterrent to investors, Investment Minister Saleem Mandviwalla said on Thursday.

“I feel (FDI) is a very cosmetic fall. I can see the graph now moving towards the positive side,” he told Reuters in an interview. Mandviwalla was in Britain to meet investors.

“Our problem is basically terrorism. It’s a very uphill task for me to talk about investment in this environment,” Mandviwalla said. “It brings us down, we sometimes wonder how we will reach our goals that we set out every day to reach,” he told an investor conference titled “Doing business in Pakistan” here.

Record high food prices were a threat to inflation levels, with annual inflation already running above 15 per cent, Mandviwalla said.

“This is a very, very difficult situation for us. Food inflation is the main problem that we are faced with.”

The resumption of peace negotiations with India was a positive step, Mandviwalla said, adding “we have been actually talking to India and I have been receiving Indian investors all the time ... we are very keen to bring Indian investment and investors to Pakistan.”

India and Pakistan said on Thursday they would resume formal peace talks, the first since New Delhi broke off peace negotiations after militant attacks on Mumbai in 2008.

Speaking at the conference at Lancaster House in London, UK Minister for Trade and Investment Lord Green said that Pakistan will be one of the world’s drivers of growth in the years to come, notwithstanding some of the challenges at present.

He said that for UK companies deciding on which export markets to target, it is important that they look at those markets that are experiencing growth.

“There are significant opportunities for partnership between UK and Pakistani firms. I would encourage businesspeople to explore these with the help of UK Trade and Investment,” he added. Over 80 business representatives from the UK and Pakistan attended the event.

Published in The Express Tribune, February 11^th, 2011.