Shahbaz Kày’s Post

Pakistan has seen a significant boost in foreign direct investment (FDI), attracting $771 million in the first quarter of FY 2024-25. This represents a 48% increase from the same period last year, totaling $520 million. According to the State Bank of Pakistan, China was the largest investor, contributing $404 million, which accounts for 52% of the total FDI. This investment is a clear indication of China's ongoing interest in Pakistan's infrastructure and industry. Interestingly, Chinese investments in September alone reached $244.8 million. However, investments from other countries, such as Saudi Arabia, Hong Kong, the UK, and the US, were relatively low, totaling $1.8 million, $98 million, $72 million, and $28 million, respectively. Despite initiatives like the Special Investment Facilitation Council, FDI from Arab countries has been limited, with only $25 million from the UAE. This cautious approach may be due to regional uncertainties, with Gulf investors waiting for more stability. It's worth noting that many Pakistani companies in the UAE are reinvesting as foreign entities to take advantage of government incentives and protections, demonstrating their confidence in Pakistan's future. Overall, the increase in FDI, mainly driven by China, is a positive sign for Pakistan. However, to maintain this momentum, Pakistan needs to attract a wider range of international investors by ensuring regulatory stability and addressing potential risks.

Pakistan attracted $771 million in foreign direct investment (FDI) during the first quarter of FY 2024-25, which is a 48% increase from $520 million during the same time last year, according to the State Bank of Pakistan. This growth shows that investor confidence is rising, especially in sectors with potential for long-term growth. China was the biggest investor, contributing $404 million, which is 52% of the total FDI, up from $164 million last year. In September alone, Chinese investments reached $244.8 million, indicating China's ongoing interest in Pakistan's infrastructure and industry. However, investments from other countries were low. Saudi Arabia invested just $1.8 million, while Hong Kong, the UK, and the US contributed $98 million, $72 million, and $28 million, respectively, which are much smaller amounts. Despite initiatives like the Special Investment Facilitation Council, FDI from Arab countries has been limited, with only $25 million from the UAE. This might be due to regional uncertainties, with Gulf investors taking a cautious approach and waiting for more stability. Additionally, many Pakistani companies in the UAE are reinvesting as foreign entities to take advantage of government incentives and protections, showing their confidence in Pakistan’s future. Overall, the increase in FDI, mainly driven by China, is a positive sign. However, for Pakistan to maintain this momentum, it needs to attract a wider range of international investors by ensuring regulatory stability and addressing any potential risks. Source: Pakistan Today, 22nd October, 2024

The Commitment to Foreign Direct Investment (FDI) and the Government of Pakistan's Role Concerning contributions made by foreign direct investments to economic development, FDI is considered a key factor. This penetration brings money and skill transfer, management skills, and export opportunities, which transform existing businesses. But, the situation in Pakistan is not making it much easier for investors to invest in the country and keep them in the industry. The government has a responsibility to shift this paradigm by: Creating a Supportive Environment: The government must make a transparent and transparent public regulatory framework so that IT can be free of bureaucracy and there are strong enforcement provisions in the contracts. Thus, the probability of foreign investor flow will rise as this facilitates the investor's entry. Addressing Security Concerns: The principal condition of investors coming from abroad is a stable, sound, and uncomplicated milieu. The government's role is to make a real impact on safety for companies and investors by putting on relevant security measures. Fostering a Level Playing Field: The government should have a level and challenging playing field for home-based and outside investors to compete. It will consequently boost consumers' confidence, enabling them to make long-term decisions on investment. Way Forward: Creating A Resilience and Sustainable Line For The Future The mission of the SIFC is not just to offer investment; it tries to work with businesses to help them grow and expand. Hence, its main target is to turn Pakistan's economic condition into both resistant and extended-term sustainable financing, one that will make the country an appealing place for foreign investors. Such learning from the situations of South Asian mate countries, especially the experiences of Sri Lanka's latest economic recovery, together with the proposed strategies, can give Pakistan's economy a way forward to a better future. The performance of the SIFC will depend on its capability to create conditions based on peace and investors' interests that showcase Pakistan's remarkable economic prospects. There should be not only a provision for facilitating mode, but the conditions should be adequately friendly, attractive, and responsive to domestic and foreign sources of capital. International Monetary Fund The World Bank Asian Development Bank (ADB)

Saudi Arabia's Investment Minister sat down with Joumanna Bercetche at FII to offer his views on FDI, trade and the economy. Watch the full clip in our link. Here's a quick preview: Saudi Arabia sees recent trends in foreign direct investment moving in the right direction, while conceding the kingdom has a long way to go to meet its 2030 goal of attracting $100 billion a year. Recent figures are “extremely positive,” Khalid Al-Falih said. “All the leading indicators are pointing upward. All lights are flashing green.” The path to reaching the 2030 target will be “steep” but “manageable." Saudi Arabia’s FDI inflows amounted to about $26 billion last year, above the government’s self-set target but still the lowest level since 2020. The data was recently revised higher, from $19 billion, to reflect what Al-Falih said was a methodology in line with International Monetary Fund standards. (NOTE: More explanation on this is in video for those interested in revisions) The kingdom aims to quadruple FDI inflows by 2030 in a bid to share some of the financial burden of spending on its economic diversification plan. Crown Prince Mohammed Bin Salman’s government also sees foreign expertise as critical to training the local population in new industries like technology and minerals exploration and catalyzing growth in those sectors. Saudi Arabia recently announced an overhaul of its investment law in a bid to cut bureaucratic red tape and make it easier for foreign investors to deploy cash into the country. The new rules are due to take effect next year. Ministry of Investment with Joumanna Bercetche

Better regulation should go hand in hand with investment promotion and facilitation. Attracting foreign direct investment is a central and desirable goal for many governments. It helps them to fulfill their promises of better jobs, higher income levels, economic development and growth. You can excel in investment promotion and facilitation, but if the “rules of the game” in your economy are simply not good, you may end up with suboptimal results or unrewarded efforts. Data suggests that foreign investors do care about laws and regulations of potential recipient countries. In this blog, Bryan O'Byrne from USAID and myself share some ideas on how Good Regulatory Practices offer different and complementary (but often overlooked) strategies for USAID partner countries and other emerging economies to attract and retain FDI. #FDI #GRP #BetterRegulationsBetterResults

For Pakistan to attract capital flows, it must embark on holistic reforms and provide a credible roadmap that excites domestic and foreign investors. The country’s economic managers have emphasised that unless there is significant foreign investment, Pakistan will not be able to meet its ambitious 3.6 percent growth rate, which the country has targeted for the next fiscal year. https://lnkd.in/gmcAquh2

Angola is leveraging international attention as it seeks to position itself as a prime investment destination in Africa with US President Joe Biden’s upcoming visit and ongoing discussions at the IMF and World Bank meetings in Washington. The focus is on the US-backed Lobito Corridor, a significant infrastructure project aimed at boosting regional trade and development. Angola hopes this initiative will serve as a catalyst for private sector participation in its economic transformation journey. Angola is seeking to unlock new markets and create a regional hub for trade and industry. The support from the US not only boosts investor confidence but also aligns Angola’s interests with those of international development partners. The upcoming engagements with the US and international financial institutions are seen as pivotal moments for Angola. They provide a platform for the country to showcase its progress and potential, emphasizing its commitment to sustainable development and economic diversification. https://lnkd.in/ew44bijS

The GCC is attracting foreign direct investment to drive economic growth and diversification. Key initiatives include regulatory reforms, infrastructure development, and a focus on innovation and technology. These efforts are enhancing the region's appeal to global investors and fostering a resilient economy. The future looks promising for the GCC as it continues to leverage FDI to build a resilient and diversified economy. Read more about how the GCC is leveraging FDI to boost regional confidence. #FDI #GCC #EconomicGrowth #Investment #Business #Innovation #EYInsights

Last Thursday, Saudi Arabia's wealth fund inked $50 billion in agreements with 6 leading Chinese institutions. At a recent International Finance Forum (IFF) webinar, M. Ayhan Kose, The World Bank's deputy chief economist, noted, while challenges exist, China is on a path toward sustainable, high-quality growth. Let’s continue the conversation about the future ahead! Find out more at https://lnkd.in/gnCegPjr. #Investment #China #IFF #GlobalEconomy

India continues to be an attractive destination for foreign investment, ranking as the world's eighth-largest recipient of FDI in 2023. Foreign investors should still be mindful of certain restrictions. Read our Indian snapshot here.