Several foreign cos show decline in profit repatriation

KARACHI - A majority of the foreign companies engaged in various businesses in Pakistan have reported decline in the repatriation of profit and dividend in the second half of the last calendar year.
From July-December 2008 the foreign companies had repatriated 445 million dollars worth profit and dividend to their parent countries. Whereas, in the same period of preceding calendar year the transfer of profit/dividend from Pakistan to other countries amounted to 501 million dollars.
The sectors which showed negative growth in the repatriation of profit and dividend were communications, tourism, transport, telecommunication, IT services, financial business, personal services, food packaging, tobacco/cigarettes, textiles, leather/leather products, chemicals, pharmaceuticals, cement, metal and automobile.
The sectors that showed growth in the repatriation of profit/dividend and some of the principle amount of foreign direct investment are: Food, sugar, petroleum refining, oil/gas exploration, fertilizers, ceramics, machinery, electronics, thermal power and trade.
According to official data, the thermal power companies have taken lead in the repatriation of profit/dividend from July-December 2008 period. The foreign companies engaged in the generation of thermal power transferred 115 million dollars (FDI/dividend) during the second half of last calendar year as against the transfer of 102m dollars in the corresponding period of 2007.
The petroleum refining was the second largest sector in sending abroad the highest amount of profit/dividend. The foreign companies engaged in this business repatriated 67 million dollars, showing an impressive increase of 39 per cent over the comparative period of 2007.
Worth noting is that the inflow of foreign investment in the above-quoted sectors amounted to $2.327b from July-Dec 2008.
Sources said that only a slight decline of 12 per cent had been observed in the repatriation of overall profit/dividend by the foreign companies in Pakistan.
Keeping in view the ongoing global and domestic recession, this decline in the transfer of profit/dividend by the foreign companies was negligible, said sources.
They said that the failure of the financial systems in the United States, the United Kingdom and intensifying economic meltdown in the Arab countries would divert foreign investment towards Pakistan. It may be noted here that in the previous two financial years the foreign companies showed an impressive growth in the repatriation of profit and dividend. However, the situation has changed during the first half of the current financial year because of different reasons.