Arsalan Ali

Pakistan needs to attract more foreign private investment to increase Gross Domestic Product and develop its economy on sustainable bases, WealthPK reports.

Investment plays a pivotal role in driving the economic development of any country. Foreign private investment has a significant role in enhancing economic growth by increasing per capita productivity, which also increases exports and provides employment opportunities to hundreds of thousands of workers.

Ayaz Ahmad, a former senior research economist at the Pakistan Institute of Development Economics, told WealthPK that foreign private investment contributed significantly to the economic growth of both developing and developed countries.

However, he said that foreign private investment was more important for developing countries to increase their Gross Domestic Product and strengthen their economies on sustainable bases. He added that developing countries had less capital to invest so they needed capital in the form of foreign investment to make progress.

Ayaz Ahmad said that Pakistan was unable to attract foreign private investment to desired level owing to the current political uncertainty in the country. “We are still making efforts to attract foreign private investment. It will strengthen the national economy if Pakistan succeeds in attracting foreign investment,” he added.

The data of the State Bank of Pakistan shows that foreign private investment in the country declined by 36.3 percent and dipped to $241.3 million in the first three months of the current fiscal as compared to $378.7 million during the same period of the previous financial year.

Ayaz Ahmad said that Pakistan could make progress and achieve prosperity by attracting foreign private investment. “Foreign private investment is an effective driver for economic growth,” he added.

He said that investment played a central and significant role in enhancing the productive capacity of any country by encouraging new production techniques.

He said that Pakistan had a consumption-oriented economy and a lower saving rate than other Asian countries. Domestic private investment is not considered sufficient to stimulate the economy.

Ayaz Ahmad said that by attracting enough foreign private investment, Pakistan could generate a lot of jobs. He said that private foreign investment would also have a positive impact on the labour force of Pakistan.

He said that foreign private investment would also enable Pakistan to benefit its citizens through the optimal use of domestic resources. “It will increase productivity and enhance exports by allowing technology transfer for development programmes. It will improve the living standard of people,” he added.

Ayaz Ahmad said that Pakistan needed to create a business-friendly environment and facilitate investors to attract foreign private investment. He said that the war against terrorism and political instability also affected foreign private investment. “These are major hurdles to the growth of the economy of Pakistan,” he added.

He said that investment was considered an effective indicator of economic growth. He said that the government was making efforts to improve the environment and attract investment.

“Total foreign investment in Pakistan, comprising foreign direct investment, portfolio investment and foreign public investment witnessed a massive decrease of 84 percent and dipped to $1.135 billion during the first quarter of the current fiscal. Pakistan’s total foreign investment was $223.1 million in the first quarter of the current fiscal as compared to $1.358 in the corresponding period of the previous financial year,” he told WealthPK.

Credit : Independent News Pakistan-WealthPk