Business

Foreign Direct Investment dropped by almost 50%

Express April 17, 2010

KARACHI:

Foreign Direct Investment in Pakistan has dropped by almost 50 per cent in the first nine months of the Fiscal Year-2010.

Investment in the period ended March 31 fell to 1.5 billion dollars from three billion dollars compared to the same period in Fiscal Year 2009. The latest figures have been released in a statement by the State Bank of Pakistan's Karachi head office.

SBP says global funds sold a net 182.6 million dollars worth of Pakistani stocks. Last fiscal year's sales of stocks was 957.5 million dollars.

COMMENTS (3)

Meekal Ahmed | 14 years ago | Reply My only point was that we should make the distinction clear and know what kind of investment we are talking about.

Khalil Hamdani | 14 years ago | Reply Foreign investment includes foreign direct investment (FDI) and foreign portfolio investment (FPI). When FDI is new investment or "greenfield", it can build factories and create jobs. But FDI can also involve acquisition of existing investment or "brownfield", as when the Government privatises public enterprises to foreign buyers; this type of FDI can mean job cuts if the new owner rationalizes production but it can also induce new or "sequential" investment to modernize the acquired enterprise, creating jobs, boosting growth and possibly exports. FDI is generally preferable to FPI, although foreign portfolio investment can bring benefits when the economy is growing and well managed. FPI outflows can be triggered by external disturbance. But both FPI and FDI respond to the state of the national economy and when domestic prospects are uncertain, FDI can dry up along with FPI, as is now the case. Hence, the focus of Government policy should be on addressing the underlying issues of energy availability, national security and global competitiveness.

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