KARACHI:
Pakistan received foreign direct investment (FDI) of $1.63 billion in 2013-14, which is 11.99% higher than the FDI received during the preceding fiscal year.
Data released by the State Bank of Pakistan (SBP) on Tuesday reveals that the absolute increase of $174.8 million in FDI recorded on a year-on-year basis in 2013-14 is mainly on the back of the auction of the telecom spectrum. The one-time sale of 3G/4G licences fetched the government $610.9 million in May.
The year-on-year increase in FDI during the first 11 months of 2013-14 was only 2.5%, with the net inflows for July-May clocking up at $1.36 billion. In the last month of 2013-14 alone, FDI amounted to $188.6 million, up almost 47% from the comparable month of 2012-13.
The largest increase in foreign investment during the last fiscal year was registered in the telecommunications sector, where net FDI remained $568.1 million. Foreign direct investment in the telecommunications sector in June amounted to $97.2 million.
Speaking to The Express Tribune, BMA Capital Management Research Analyst Iqbal Dinani said the annual increase in FDI appears unimpressive after discounting the one-off transaction of the spectrum auction.
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“FDI will likely see improvement in the coming years because Pakistan is expected to continue its privatisation and reform programmes under its agreement with the International Monetary Fund,” Dinani said.
FDI in the first half of the last fiscal year was $416.1 million, 26.8% down from the amount the country received in the corresponding six months of the preceding fiscal year.
The oil and gas sector attracted the second highest amount of FDI in 2013-14, with net foreign investment of $465.1 million. However, it was 16.9% lower than the investment of $559.8 million that the sector received in the preceding fiscal year.
Other sectors of the economy that received major FDI during 2013-14 include financial businesses ($156.8 million), chemicals ($88.4 million), tobacco and cigarettes ($40.6 million), food ($87.4 million), power ($46.6 million), personal services ($34.7 million), cement ($22 million), construction ($24.4 million), cars ($27.2 million) and beverages ($23 million).
Sectors of the economy that experienced a considerable net outflow of FDI in 2013-14 were petroleum refining ($17.4 million), electrical machinery ($10.7 million) and trade ($7.6 million).
As for foreign portfolio investment (FPI), which includes foreign public investment, Pakistan attracted $2.74 billion during the July-June period, more than 21 times higher than the FPI worth $124.2 million received in the preceding fiscal year.
Countries that brought significant amounts of FDI into Pakistan in 2013-14 include China ($700.3 million), Switzerland ($226.3 million), United States ($206.4 million), Hong Kong ($226.9 million), United Kingdom ($115.9 million), Italy ($64.7 million), France ($72.5 million), Austria ($63.4 million) and Oman ($37.1 million).
Countries that took out major investments out of Pakistan in 2013-14 are Norway ($21.6 million), Finland ($28 million), Qatar ($58.5 million), Saudi Arabia ($47.8 million), Singapore ($46.2 million), Malaysia ($17.5 million), Luxembourg ($21.6 million) and Canada ($21.9 million).
Published in The Express Tribune, July 16th, 2014.
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COMMENTS (9)
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The number is a typo. Shouldn't it be $1.63 million??
I am a non-resident Pakistani and keep following people commnets on news. I keep seeing that people in Pakistan nowadays are full of criticism and most of the people are very pessimistic and sarcastic. The govermnet should be allowed to work and inshallah electricity issues will also be solved sooner or later.
Off course pmln govt has nothing to do with it! Right Imran ?
@eio: You may not understand the role media has to play but despite the negative media reporting in Pakistan, foreign investment analysts remain positive on Pakistan since the new government came in. It is seen as business friendly. I can only imagine how much more investment would come if there was less political squabbling and less negative media.
I always consider half empty glass as half full....i am sure this nation has all the potential to rise again...200 billion USD of pakistanis in switzerland can solve all the issues, gold reserves in Balochistan is great help by Allah and obviously overseas Pakistanis if guided properly towards investment projects they can invest billions of USD in Pakistan...we have hopes from every direction...Pakistan Zindabad
@Shuaib Bhat: As if foreigners care about what the Pakistani media has to say. They know from their media that the country is in bad shape and getting worse day by day.
@pakistan positive: TBF PPP had to deal with an activist Chief Justice. A spectrum auction under the last government would surely have attracted a suo moto notice. Corruption charges would have been leveled. The country's reputation would have been hurt further.
PPP had a chance to auction 3G/4G as well.. they did not.. Give credit where it is due.. 3G/4G auction was a milestone of PMLN's first year.. This is the best news in past month or so..
If our media wasn't so negative we might have gotten over a 20% increase anyhow this is a major improvement too.