Ayesha Saba

Pakistan needs an appropriate investment environment to ensure a sustained inflow of foreign direct investment (FDI), said Director General of International Institute of Islamic Economics (IIIE) of International Islamic University (IIU) Professor Dr Abdul Rashid . He told WealthPK that plenty of investment opportunities are available in various sectors of the national economy. The international and domestic investors should take advantage of technology transfer opportunities.

“There is a huge potential for development and progress and job opportunities in the sectors of logistics, port and shipping, wind and solar energy production, textile and information technology, construction, tourism and hospitality and food processing.” He further said wind and solar energy generation sectors are also open for investment in the production of renewable energy. “Pakistan’s current policies on foreign investment are not very attractive. Availability, reliability, and cost of infrastructure facilities are essential ingredients of a business environment conducive to foreign investment,’’ Dr Abdul Rashid opined.

He said Pakistan compares unfavourably its infrastructure facilities with the other developing countries that have attracted higher levels of foreign investment. “The external environment is already very challenging for many emerging markets and developing economies. The sharp appreciation of the US dollar adds significantly to the domestic price pressures. Capital flows have not recovered, and many low-income and developing economies remain in debt distress,” he added.

By attracting foreign direct investment (FDI), a country can gain access to the global value chains and facilitate its economic development. A country benefits from FDI in many ways, including increased jobs, increased exports, supply chain spill-over, innovative technologies, and creative business practices. Although FDI is recognized for its benefits, it cannot be realized without a conducive policy and legal and institutional environment. In a report, the Pakistan Business Council states that the country should seek “high-quality” investments that provide access to export markets, technology and capabilities.

It pointed out that Pakistan should promote economic transformation in the sectors targeted for FDI and address its generic and long-standing weaknesses in the ease of doing business which are affecting both foreign and domestic investors. “Even well-functioning special economic zones should not be the end goal of investment policy but an element of a broader industrial strategy,” says the report.

Credit: Independent News Pakistan-WealthPk