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Most productive projects and enterprises in a country are financed locally and generate revenue in local currency. Domestic capital formation is the driving force behind any country's development. At the same time, foreign investment has a critical role to play. Attracting international capital helps to close the gap between local savings and investment needs. In the cover story efforts are made to discuss the key issues facing the sectors having the largest foreign investment. These include oil & gas exploration, power generation, insurance and pharmaceutical sectors as well as capital markets and institutions like CDC and IFC.

Foreign investors are keenly observing the forex management policy and capital controls in Pakistan. The continuation of these policies is linked with the forex reserves of the country, prices of commodities being imported and exported and normalization of relationship with the multilateral lenders.

Pakistan has often come up with attractive policies but no sooner did the policy announced amendments and different interpretations distorted them. Pakistan opened the market much earlier than India but has received far lesser investment though India also suffered from political instability.


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