Pakistan’s foreign investment falls 60.8 pct in July

Discussion in 'Pakistan' started by Blackwater, Aug 16, 2011.

  1. Blackwater

    Blackwater Veteran Member Veteran Member

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    KARACHI: Foreign investment in Pakistan fell 60.8 percent in the first month of 2011/12 fiscal year (July-June) to $61.9 million, because of a decrease in foreign direct investment and foreign portfolio investment, the central bank said on Monday. Foreign investment totalled $157.8 million in July 2010.

    Foreign direct investment fell 17.2 percent in July 2011 to $90.9 million from $109.8 million in the same period last year, the State Bank of Pakistan said. Pakistan’s unstable security, a Taliban insurgency in the country’s northwest and chronic power shortages have put off long-term investors, analysts say.

    With around 300 people killed in July because of violence in the country’s main commercial hub, investors have become nervous and started shunning the country’s main stock exchange. Foreign portfolio investment fell 160.4 percent with outflows of $29 million in the first month of fiscal year 2011/12, compared with inflows of $48 million in the same period last year.

    Pakistan has struggled with a troubled economy and an International Monetary Fund (IMF) emergency loan package agreed to in November 2008 that helped it avert a balance of payments crisis and shore up reserves. It received the fifth tranche of $1.13 billion of the $11 billion loan in May 2010.
    :confused::confused::confused:

    Pakistan’s foreign investment falls 60.8 pct in July | Business | DAWN.COM
     
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  3. Blackwater

    Blackwater Veteran Member Veteran Member

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    I dont understand why world dont want to invest in the most prosperous and nuclear, unclear, powerful, Islamic world leader pakistan????:confused::confused:
     
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  4. Rage

    Rage DFI TEAM Stars and Ambassadors

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    This was truly screw them over.
     
    Last edited: Aug 16, 2011
  5. Virendra

    Virendra Moderator Moderator

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    Provided that the investment doesn't come back for a long time. If Karachi cools down, it will be back at least near to the previous mark.
    FDI is a more visible money flow as compared to other aids/loans or secret deals that end up warming a few GHQ pockets in Pakistan. This money was helping Pakistan's economy, more than its corrupt ruliers.

    Regards,
    Virendra
     
  6. Rage

    Rage DFI TEAM Stars and Ambassadors

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    It's not goin to. Pakistan's FDI inflows have been on a downward spiral since Feb this year. The only thing propping up foreign investment has been portfolio investment. And even that fell by over 90% in Feb and by over 18% in 1HfY11 YOY.

    Basically the linchpins of foreign investment in Pakistan are the energy, telecommunications and banking sectors. And the power sector has seen most investment mostly becuz of recurring operational expenditures, which inflate with rising inflation and capacity deterioration. If you look at who dominates the power and banking business, it's all the politicians.

    Domestically, the power sector is being crippled by rising tarrifs, the banking sector by interest rates and the telecommunications sector by taxes. The last is the only real venture that has seen the emergence of some small civil business class. Portfolio investment, which has traditionally propped up foreign inflows, are risk sensitive. And as long as the violence in Karachi sees no end, those will stay slacken.

    Over 70% of Pakistani Federal Govt. revenues come from the city of Karachi. You cripple Karachi, you cripple the Pakistani govt.'s ability to pay debt. You cripple their ability to pay debt, you cripple their credit rating. You cripple their credit rating, you deter foreign investment.

    China is the only crutch for this cripple.
     
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  7. JayATL

    JayATL Senior Member Senior Member

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    down goes fraizer!
     

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