ISLAMABAD – The economic worries for Pakistan increase further as theForeign Direct Investment has reduced drastically for the cash starvedcountry.

FDI inflow is down 34 percent, while gross outflow is up 18 percent. Theresult net FDI is down 45 percent.-

Investments from our Chinese brothers in July 2018 remained at last year’slevel; $74.5 million as against $73.4 million in July 2017. This means thatPakistan’s reliance on Sino-investments has increased one notch further.

It also means that non-Chinese FDI was in fact down by 66 percentyear-on-year in July 2018. This is a continuation of the trend seen in lastfiscal year when non-Chinese FDI fell 22 percent. A continuation of thistrend will push Pakistan further into the heart of what’s called the Dutchdisease.

The easiest answer to this trend is the oft cited ease of doing businessproblems, etcetera. But as BR Research’s analysis of comparative historicalreturns enjoyed by US investors in Pakistan showed earlier this month, whenthe returns are high, the arguments like consistency in policy and cost ofdoing business become somewhat irrelevant, and problems of perception orimage takes front seat.

This brings us to the role of apex investment promotion agency: the federalBoard of Investment (BoI). At the one end, Pakistan’s BoI has been unableto successfully implement second generation FDI promotion policies that aimat boosting a country’s exports, productivity and technology adoption. Atthe other end, the BoI’s focus on image building and investment generationhas been weak.

The former includes activities like advertising in general financial media;participating in investment exhibitions; advertising in industry or sectorspecific media; conducting general investment missions from source countryto host country or from host country to source country; and conductinggeneral information seminars on investment opportunities. The latterincludes activities like engaging in conducting industry- orsector-specific information seminars; and engaging in firm-and or industryspecific research followed by sales presentations.