KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI) - the premier body of 195 leading foreign companies operating in Pakistan - has expressed its dismay at the unexpectedly low inflow of foreign direct investment (FDI) in fiscal year 2014-15.
In the last 12 months (July 2014 to June 2015), Pakistan received just $0.7 billion in FDI, down 58% compared to the already low $1.7 billion investment in the previous year.
Contrary to this, OICCI members during the same period invested $1.5 billion from their retained earnings in Pakistan.
“It highlights the fact that potential overseas investors have not been able to shake off their negative perception about Pakistan’s investment climate despite the recent stabilisation of economic and security situation and improved business confidence within the country,” OICCI President Atif Bajwa said.
“It seems that before committing medium to long-term investments, foreign investors would like to see further evidence of improvement in policy implementation, transparency in governance and sustained stability in the security environment.”
With positive developments in these areas, he added, overseas investors would likely take advantage of the otherwise business-friendly policies in Pakistan.
Bajwa also made a direct pitch to foreign investors who are not operating in Pakistan by highlighting that during the last five years, the compound annual growth in turnover and profits of foreign-owned companies listed on the Karachi Stock Exchange had been in high double digits.
To make the most of this situation, OICCI members invested nearly $1.5 billion last year from their retained earnings to ensure their market share was sustained.
The OICCI expressed satisfaction with the government’s recent initiative to constitute a high-powered committee to suggest measures to improve the country’s ranking in the World Bank’s Ease of Doing Business (EODB) survey, where the OICCI is also represented.
The chamber said it had been regularly recommending that impediments to potential investments identified in the annual EODB surveys, the OICCI-sponsored six-monthly Business Confidence Index as well as its Perception and Investment Survey needed to be taken seriously.
The issues highlighted in the surveys should be addressed timely by the relevant federal and provincial authorities, it said while offering full support and assistance in this respect.
The chamber also reiterated the need for a true, enhanced and regular engagement of the political leadership and government functionaries with the investment and business community, as challenges of developing economies could only be resolved through a strong public-private partnership.
Published in The Express Tribune, July 24th, 2015.
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