Investor sentiment : OICCI expresses concern over falling FDI

Managing committee urges govt to take remedial measures.

KARACHI:

The Managing Committee of Overseas Investors Chambers of Commerce and Industry (OICCI) –the premier body of nearly 200 multinationals operating in Pakistan – has expressed its dismay on the poor Foreign Direct Investment (FDI) inflow that clocked in at just $87 million during the first two months of the ongoing fiscal year.

Data released by the State Bank of Pakistan (SBP) showed that FDI during July and August of 2014-15 dropped by a significant 37%.

The OICCI stated that this was a significant drop in FDI since it was compared to an already low base in the same period of the previous fiscal year.

OICCI President Asad S Jafar said overseas investors were attaching a lot of importance to various issues in Pakistan. “It highlights the growing importance of issues such as security, energy shortages and governance levels,” said Jafar.

The managing committee, while reviewing the business environment, urged the federal and provincial governments to take emergency measures in order to attract higher FDI inflows, in an effort to avoid long-term implications.

In an attempt to assist authorities, the OICCI offered to share the experience and expertise of members who have benefitted from investing in Pakistan.

The committee also expressed concern at the current level of engagement between relevant government functionaries and the business community, including the OICCI. It was suggested that challenges facing the developing countries can be overcome if two worked in tandem.

“The main reason behind the heavy inflow of FDI in various Asian countries was good governance along with sound physical and institutional infrastructure.”

The committee suggested that urgent improvement was required in these areas while Jafar urged the government to fill all the key vacancies in the regulatory and state-owned organisations.

Additionally, the official said that the federal and provincial governments needed to introduce a robust accountability mechanism to build confidence and help counter any misperception regarding Pakistan’s international image.

All these actions would ensure that the country moves towards realising its true potential for economic growth, stated the OICCI.

Published in The Express Tribune, September 18^th, 2014.

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