APBF calls for promoting FDI
The All Pakistan Business Forum has urged the government to promote foreign direct investment (FDI) which has been maintaining a steady decline from a $5.2 billion peak in 2007-08 despite the government spending on overseas trade offices have been increased to Rs1.7 billion in 2016-17.
APBF president Ibrahim Qureshi said that only political will and drastic steps can revive the economy, which should be grown significantly and constantly for visible impact. He advocated the need for raising the country’s tax base so that tax-to-GDP ratio improves from current 9%.
Foreign direct investment fell by 45 percent to $460 million in the first five months of the current fiscal year, giving a disappointing picture of the economy.
However, it is good that the investment has shown a sign of improvement during first six months (Jul-Dec) after a long time as inflows improved 10 percent to cross the $1 billion mark. During the period, overall investment increased by 50 percent to $1.8 billion but this increase was achieved by involving the money borrowed through the Eurobond.
Quoting the State Bank of Pakistan data, he said that FDI has been declining for the last three years despite regular investments from China.
He said that the primary function of trade offices is to promote exports that have persistently been falling for a long time. Country’s exports during 2015-16 dropped by 12 percent to $20.8 billion despite the fact that government expenses to run foreign trade offices have jumped by over 30 percent.
Besides governance challenges, adverse security perception and political instability the foreign trade offices role is also vital to promote exports and attract FDI, he pointed out.
Ibrahim Qureshi urged the trade officers to explore opportunities to diversify exports of goods and services in their respective areas.
He appreciated the commerce ministry’s resolve to meet the challenges faced by Pakistan in European markets vigorously, suggesting it to devise strategies to promote Pakistani products. He called upon trade officers to take advantage of opportunities offered by China-Pakistan Economic Corridor and growth in Pakistan’s national economy made possible by strengthening of democratic institutions and improvement of security situation in Pakistan.
FDI improvement in Dec 2016 reflects the improvement in security situation, implying that investors had started coming back to Pakistan. Moreover, country’s liberal policies of investment offered one of the most attractive investment regimes in the region.
APBF president said that Pakistan’s trade with European Union has increased substantively after the grant of GSP+ status to Pakistan.
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