ISLAMABAD – Pakistan has continued to attract Chinese investment related tothe Belt and Road Initiative, with Foreign Direct Investment (FDI) inflowsrising from $2.5 billion in 2016 to $2.8 billion in 2017, says WorldInvestment Report (WIR) 2018.
The United Nations Conference on Trade and Development (UNCTAD) WIR 2018“investment and new industrial policies” states that FDI to Pakistanincreased from $2.479 billion in 2016 to $2.806 billion in 2017.
FDI inflows to South Asia contracted by 4 per cent to $52 billion, owing toa drop in inflows to India. FDI to India decreased from $44 billion in 2016to $40 billion in 2017 i.e. by over 10 percent. FDI to Bangladesh alsodecreased by around 7 percent from $2.333 billion in 2016 to $2.152 billionin 2017. FDI inflow to Sri Lanka increased from $897 million in 2016 to$1.375 billion in 2017, and for Nepal FDI increased from $106 million in2016 to $198 million in 2017.
Outflows FDI from Pakistan jumped from $52 million in 2016 to $67 millionin 2017. Outflows from India, the main source of FDI in South Asia, morethan doubled to $11 billion in 2017 against $5.07 billion, while outflowsfrom Bangladesh remained $170 million in 2017 compared to $41 million in2016.
Inflows to the Islamic Republic of Iran increased by nearly 50 per cent to$5 billion. Following the lifting of sanctions in 2015, the country’s richreserves started to attract significant foreign participation in theexploration and production of oil and gas.
The United States remained the largest recipient of FDI, attracting $275billion in inflows, followed by China, with record inflows of $136 billionwhile India is at 10th position with $40 billion inflows.
Global FDI flows fell by 23 per cent to $1.43 trillion. This is in starkcontrast to the accelerated growth in GDP and trade. The fall was caused inpart by a 22 per cent decrease in the value of cross-border mergers andacquisitions (M&As). But even discounting the large one-off deals andcorporate restructurings that inflated FDI numbers in 2016, the 2017decline remained significant. The value of announced greenfield investment– an indicator of future trends – also decreased by 14 per cent, maintainedin the report.