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A focus on FDI in Pakistan

The Foreign Direct Investment (FDI) is regarded as one of the most significant contributors of economic development of any state. I would also like to mention here that the positive character of population also attracts the FDI in any state if the population is dishonest nobody will come to invest in any state.

No doubt, FDI is an integral part of an open and effective global economic system and a main catalyst to development. Yet, the advantages of FDI do not accrue automatically and evenly across states, sectors and local communities. National strategies and the foreign investment architecture also matter for attracting FDI to a larger number of developing states and for reaping the full advantages of FDI for development. The issues mainly address host states, which need to organize a transparent, broad and effective enabling strategy environment for investment and to build the human and institutional capacities to implement them. Global investment is seeing a modest recovery, with projections for 2017 cautiously optimistic. United Nations also mentioned in a brief report that global flows are forecast to rise to almost $1.8 trillion in 2017, continuing to $1.85 trillion in 2018 – still below the 2007 peak. Policy uncertainty and geopolitical risks could hamper the recovery, and tax strategy changes could considerably affect cross-border investment.



Pakistan received $2.41 billion in FDI in fiscal year 2017, up 5 percent as against to the previous year, but much lower than the record high of $5.4 billion received in fiscal year 2008. The economic experts mentioned that FDI from leading Western states has been on the decline in the country for the previous few eras and UK is no exception. They also identified that FDI coming from the UK declined to just $69 million during FY2017, down 54 percent from $151 million in the last year.

FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
Total investment
Gross investment
National Savings

FDI in Iran has been hindered by unfavorable or complex operating requirements and by foreign sanctions, although in the early 2000s the Iranian government liberalized investment regulations. Iran absorbed US$24.3 billion of foreign investment from 1993 to 2007 and US$34.6 billion for 485 projects from 1992 to 2009. The economists mentioned in a statement that having attracted some $12.2 billion worth of FDI, Iran was the second biggest FDI destination in the Middle East and North Africa region in 2016.


The Indian Ministry of Commerce and Industry stated in a report that FDI inflow to India during FY2015 was $45.15 billion, almost $9 billion greater than $36.05 billion registered during FY2014. Later, it grew to $55 billion in FY2016. According to the Department of Industrial Policy and Promotion (DIPP), total FDI investment that India received during April 2016 to March 2017 grew 8 percent year-on-year to $60.08 billion. During April 2016 to March 2017, India attained the maximum FDI equity inflows from Mauritius ($15.73 billion), followed by Singapore ($8.71 billion), Japan ($4.71 billion), Netherlands ($3.37 billion) and the US ($2.38 billion).


China attracted a record high US$139 billion of foreign direct investment (FDI) in 2016, making it the third largest FDI destination in the world. While global FDI flows fell by 13 percent year-on-year to US$1.52 trillion, China received an increase of 2.3 percent FDI inflow. The trading economics statistics showed that FDI into China fell by 0.1 percent year-on-year in the first half of 2017 to 441.54 CNY billion (US$65.1 billion), following a 0.7 percent decline during the January to May period.

In June alone, FDI grew by 2.3 percent to 100.45 CNY billion (US$14.8 billion). It is also mentioned that FDI in China averaged 419 USD HML from 1997 until 2017, standing an all time high of 1262.67 USD HML in December of 2015 and a record low of 18.32 USD HML in January of 2000.

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