In a significant economic development, Pakistan has witnessed a remarkable 35% increase in Foreign Direct Investment (FDI) in the first half of the ongoing fiscal year 2023-24, reaching a total of $863 million. Recent data from the State Bank of Pakistan (SBP) highlights substantial investments in December and notable inflows from China and the Netherlands as key contributors to this surge. Muhammad Azfar Ahsan, former chairman of the Board of Investment (BOI), attributes Pakistan's FDI boom to the government's commitment to economic reform and resilience in the face of global uncertainties. "With a strategic focus on revitalising economic growth, the government has initiated a comprehensive plan aimed at removing obstacles to FDI inflows," he told WealthPK. "The BOI has taken the lead in facilitating a conducive environment for foreign investors, carving out a seamless process from project identification to approvals, while also streamlining coordination with relevant government agencies."

He said that the establishment of the Special Investment Facilitation Council (SIFC) was a key part of this strategy, which served as a beacon for potential investors, signalling the government's commitment to fostering a business-friendly environment. "This move comes at a crucial time for Pakistan as it is grappling with many economic challenges, including dwindling reserves, a weakening currency and high inflation rates," he said. The former BOI chairman added that SIFC's establishment aligned with the broader goal of stimulating economic activity, creating employment opportunities, and injecting liquidity into key sectors. "By facilitating a smoother investment process, the government anticipates an influx of foreign capital that can contribute significantly to economic recovery and development." Ahsan said Pakistan's economy needed both short as well as long-term measures for proactively tackling the current impediments.

"Some of the major areas in which policy interventions are required include structural reforms and improving the investment climate both for foreign and local investors." He pointed out that though Pakistan had made efforts to address various investment challenges, sustained progress was essential to unlock its full economic potential and compete effectively in FDI in the global market. FDI increased 6.4 times to $211 million in December 2023 from $33 million in the same month the previous year in several sectors of the economy, including power, oil and gas exploration, banking and petroleum refinery. Moreover, this investment represented a 61% rise from November 2023, according to the SBP data.

Credit: Independent News Pakistan (INP)