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LCCI for shift in strategy to attract Foreign Direct Investment

LCCI for shift in strategy to attract Foreign Direct Investment

LAHORE: The Lahore Chamber of Commerce & Industry Saturday expressed deep concern over shrinking Foreign Direct Investment in Pakistan by major economies during the last one decade and emphasized for a shift in the strategy.

LCCI Acting President Khawaja Khawar Rashid, Vice-President Zeshan Khalil and Executive Committee said that from the year 2008-09 to 2016-17, investment from USA, UK, UAE, Japan, Hong Kong, Switzerland and Germany dropped heavily.

Giving a breakup, they said that investment from USA has fallen from $869.9million to $71.1million. Likewise, UK’s investment came down from $263.4million to $68.9million, UAE from $178.1million to $55.8million, Japan from $74.3million to $45.2million, Hong Kong from $156.1million to $25million, Switzerland from $227.3million to $58million during this period.

They said that decline in Foreign Direct Investment has actually revealed weakness in our policies and system which must be rectified otherwise situation would be further aggravated. It is a matter of concern that not only foreign investors are making their ways to the other countries of this region but the local investors are losing their trust because of various issues.

The LCCI office-bearers said that Pakistan’s foreign missions abroad would have to play a key role in attracting foreign investors. Foreign investors should be informed that Pakistan has lucrative opportunities for investment in various sectors of economy including textile, energy, agriculture, tourism, health, education and other sectors.

They said that there are 48 countries which have signed Bilateral Investment Agreements with Pakistan, but their share in total investments in Pakistan is negligible. They said that Pakistan Board of Investment has to target these countries for marketing the investment potential of Pakistan.

The LCCI office-bearers said that special Economic Zone Act was promulgated in September 2012. Among the fiscal benefits to foreign investors, one time exemption from custom duties and taxes for all capital goods was expected to turn around the economic activities, but it did not happen that way. Similarly, under Investment Policy 2013, there was equal treatment to local and foreign investment and the foreign equity up to 100% was allowed but these steps did not produce healthy results. The investment to GDP ratio of Pakistan is around 16% whereas, for a developing country, it should be around 30%.

They said there are almost same countries which are investing in Pakistan since long which include USA, China, Luxembourg, UAE and UK. New investors from other countries should be encouraged to consider Pakistan as investment hub. There are a number of reasons of low level of FDI which includes political instability, policy ad hoc, high cost of doing business, poor law and order and corruption. Favorable business climate for the foreign investors is the need of the hour for which BOI must take measures on war-footing basis.