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FDI up 22pc in 8 months

T A MALIK

ISLAMABAD: Foreign direct investment (FDI) in the country increased by 22 percent during first eight months of the current fiscal year, as compared to the investment in the corresponding period last year.

The country received $ 334 million as FDI from July to February of the current fiscal, against $ 275 million of the same period in 1998-99.

Total foreign investment was $ 326 million in the eight months of the current fiscal because the investors withdrew their portfolio investment amounting to $ 8.4 million. Total investment during the same period last fiscal was $ 286 million dollars.

The country is experiencing declining trend in foreign investment for the last two months. The investors have put in only $ 12 million and $ 16.4 million in January and February, 2000, respectively. The slight increase in the investment within two months will take time to restore the confidence of the investors in Pakistan, an official of finance ministry told Business Recorder.

The British and American investors put in $ 147 million and $ 109 million as FDI during first eight months of the current fiscal. However, the country failed to attract significant investment from UAE, Germany, France, Hong Kong, Italy, Japan, Saudi Arabia, Canada, the Netherlands and Korea.

chemical, pharmaceutical and fertilizer sector was on top, where the foreigners invested $ 106 million from July 1999 to February 2000.

Power sector fetched only $ 54 million; food, beverages and tobacco received $ 46 million; mining and quarrying and oil exploration $ 39.5 million; construction $ 19 million and petro-chemical and refining $ 12 million during the period under review.

Nine economic groups including financial business, electrical machinery, machinery other than electrical, electronics, trade, textile, cement, sugar, metal products, tourism and paper and pulp received only $ 49 million, but not more than $ 6 million individually.

The country received FDI of $ 25.2 million in July 1999, $ 24.7 million in August, $ 98.4 million in September, $ 67.5 million in October, $ 34.9 million in November, $ 55.3 million in December, $ 12 million in January 2000 and $ 16.4 million in February.

Of the foreign investments, $ 8.4 million was withdrawn from the stock market by the investors during the eight months.

Giving the reasons for low investment, sources said that a number of issues were pending in the BoI because the meeting of the Cabinet Committee on Investment has not been convened for the last five months. The BoI is working without its chairman and secretary and is directionless.

The new government should announce an investment policy to attract the investment and to boost the economy, they added.

Sources further stated that foreign investors have contacted the BoI for putting investment in any sector.