ISLAMABAD - The deteriorating law and order situation of the country due to militancy is taking a heavy toll on economic front too, as the Foreign Direct Investment (FDI) during the first quarter (July-Sept 2009) of the fiscal year 2009-10 has plunged by 29pc against the corresponding period of the last financial year 2008-09.
The situation is moving from bad to worse with each passing year, as the FDI during the last fiscal year 2008-09 remained almost half as compared with the financial year 2007-08, TheNation learnt on Monday.
Sources informed that the investment during the last fiscal year (2008-09) was $3.72b, while it was around $5.15b in 2007-08 and $5.14b in 2006-07. All these figures clearly indicate that FDI has been dipping for the last few years. According to SBP, FDI in Pakistan during the first quarter (July-Sept 2009) of fiscal year 2009-10 has declined by 29pc and stands at $463m as compared with the corresponding period of last fiscal 2008-09 when it was $1.12b.
The sources revealed that foreign investors had not been coming to Pakistan for the last couple of years mainly due to the deteriorating security situation. They informed that there were currently worth $10b projects available for investment in Pakistan but the global economic meltdown and the internal situation, especially security situation, were creating impediments to attract investment.
It is important to mention here that some of the local businessmen are also shifting their business to the neighbouring countries like Bangladesh due to unfriendly business atmosphere in Pakistan.
On the other side, Ministry of Investment, a few months back, unveiled five-year proposed investment policy aiming at attracting around $75 billion local and foreign investment. According to Federal Minister for Investment Waqar Ahmed, soon the policy would be presented before the cabinet for approval.
The policy included FDI strategy to attract the investment by adopting three actions programme. These included enhancing the international image of Pakistan as an investment location, promoting investment projects by international investment and providing services to potential and actual foreign investors in Pakistan.
Meanwhile, economists and analysts say, For attracting foreign investors, we must restore confidence of our own business community, as in the current situation we are not only facing law and order problems but also the issues like power and gas shortages. These are the main hurdles in the way of economic prosperity.