Foreign direct investment jumps by 137pc in q1 of fy2019-20.

• Author: Kazmi, S. Kamal Hayder

Byline: S. Kamal Hayder Kazmi

Presently, the State Bank of Pakistan (SBP) reported that total foreign direct investment (FDI) in Pakistan jumped by 137 percent, or $512 million during the first quarter of FY2019-20. The total investment during the July-September 2019 period clocked in at $886 million as against to $374 million during the corresponding period in 2018. Studies revealed that for an investor, the expected relative risk/return ratio is the driving force of investment decisions.

Therefore, they tend to invest in countries and projects where they expect the highest returns and the lowest risks relative to alternative investment opportunities. The government officials also recorded that Pakistan's success in attracting foreign investment thus depends on its competitiveness as an investment location relative to other countries. Boosting Pakistan's international competitiveness on a global scale will be crucial in reaching Pakistan's growth targets in general and its FDI targets in particular. Pakistan is widely perceived as a high risks investment proposition. A pro-active campaign will be launched under this FDI Strategy to enhance Pakistan's international image as an investment location. International investors must be persuaded that Pakistan, despite challenges, offers investment opportunities with risk/return ratios outcompeting alternative opportunities elsewhere. This calls for a strategy concentrating on identifying, developing, marketing and facilitating "Competitive Projects" in Pakistan.

SBP statistics also showed that in a breakup of the total investment, the central bank posted a 51 percent increase in foreign private investment during the period under review. The investment under this head increased to $564 million during the 3-month period in contrast with $374 million during the same quarter previous year. Foreign direct investment (FDI), however, declined by 3 percent during the period under review to $542 million as against to $559 million during the corresponding months previous year. On a month-on-month basis, total foreign investment rose to $622 million during September 2019 as...