Foreign direct investment – as crucial as it is – has been critically weak in Pakistan over the last decade with no meaningful rebound. The country has been inflicted with its homegrown structural challenges that have a discouraging effect on the investors. Of late, the political uncertainty and economic instability is triggering complete halt in any sort of Greenfield investments. On the other hand, brownfield investment is also drying up. Most FDI in the country is in imports-related sectors such as that by MNCs instead of export oriented segments. Political uncertainty and economic mismanagement in the last three months brought another bout of fear among the foreign investors – a reflection of which can be found in recent FDI stats. The latest budget announced also did nothing FDI sectors. The delay in IMF agreement is again playing its role in keeping the foreign investors on fence. And all this adds to the existing structural challenges faced by foreign investor such as complex taxation and other doing business indicators.
