Lahore, May 22, 2012 (PPI-OT): The Lahore Chamber of Commerce and Industry Tuesday expressed grave concern over sharp decline in foreign invest that fell sharply by $926.6 million, or 66.5 percent, to $466.5 million during July-March 2011/12 against $1.393 billion in the corresponding period last year.
In a statement issued here, the LCCI president Irfan Qaiser Sheikh said that rising risk perception about investing into Pakistan is hitting hard the entire economy and needs to be tackled through a comprehensive policy approach by involving Chambers of Commerce in the country.
The LCCI President said that severest-ever energy shortfall, bad law and order situation, institutional fragility and the political instability were the major factors keeping the foreign investors away. The LCCI President feared that the fall in Foreign Direct Investment was likely to affect adversely the country’s economic growth therefore the government should adopt remedial measures to reverse this trend and to attract foreign investment.
At the same time, the LCCI President said, the slow government response to deal with aggravating energy crisis was also spoiling not only the local investment scenario but also sending a very negative signal to potential foreign investors.
Irfan Qaiser Sheikh said that a special committee comprising members of the Parliament, Presidents of Chambers of Commerce and Industry and representatives of Association should be formed to identify the solutions to attract foreign investment that is a prerequisite to economic growth.
The LCCI President said that the proposed committee should also be tasked to look into the existing policy framework and if there is a need to redesign new policies it should immediately initiate work on them.
Irfan Qaiser Sheikh said that all the developed countries accord special importance to economic issues and the challenges. But in Pakistan the situation is the other way round and the economy is on the bottom of government to-do list.
He said key issues including power shortage, poor infrastructure, law and order situation and other vital factors, should be addressed on priority basis to improve the bleak foreign investment condition to put the country on track of economic growth and development. “At the same time the government should ensure that all institutions remain immune to any sort of undue interference as this will help improve quality of governance without which foreign investment cannot be attracted.”
The LCCI President said that a number of sectors in Pakistan including infrastructure development, coal, energy, agriculture, livestock, textiles and pharmaceutical offer lucrative investment opportunities to foreign investors but unfortunately due to absence of a proper marketing strategy these opportunities are unattended even today.
It may be mentioned here that Pakistan’s investment rate was only 13.4 percent at the end of last fiscal year, which was lowest since FY74. The low saving rate, coupled with wary foreign investors led to record low investment rate in the country. The FDI inflows registered phenomenal growth in the last decade, as it grew from $483 million in FY02 to $4.509 billion in FY08.
However, political instability discouraged the foreign investment and it plunged to $2.15 billion in FY10 and further declined to $1.573 billion in FY11.
For more information, contact:
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +9242 111 222 499
Fax: +92 42 636 8854