Construction sector has huge prospects for foreign investors: Nauman Kabir
Pakistan Industrial and Traders Association Front (PIAF) Chairman Mian Nauman Kabir has said that the construction sector has huge prospects for foreign investors, as the country has been lacking at least 10 million house units for its more than 220 million population.
Mian Nauman Kabir, in a joint statement with vice-chairman Javed Siddiqi, said that Pakistan has been unable to attract any sizeable foreign investment for the last several years despite providing incentives on taxes and assurances for the one-window facility to the investors.
Quoting the statistics, he stated that the country received $1.3 billion in FDI during July-Feb 2020-21 compared to $1.85 billion in the same period of last year, a decline of 29.9%, indicating that the government has failed to win the confidence of foreign investors in the national economy due to multiple reasons. Moreover, the inflow of FDI in February has registered a steep fall of 44% to $155 million against the inflow of $277.5 million in Feb 2020. It is fact that the entire world has been witnessing falling inflows of FDI due to the Covid-19 pandemic.
Mian Nauman said that the pandemic has eroded the trust of investors in investment, which has an adverse impact on every step of FDI, including input supplies, increasing uncertainties, and liquidity constraints for the multinational firms, he said and added there are also other external factors out of the government’s control.
He asked the government to prepare the ground for attracting larger FDI flows in the medium and long terms, making the local environment more attractive for foreign investors. Pakistan should continue to get some FDI under the China-Pakistan Economic Corridor (CPEC) and even accelerate its inflows by gaining wider domestic socio-political support for CPEC projects.
PIAF Chairman said that faced with a balance-of-payments issue, the country urgently needed as much foreign investment as possible keeping in view of the limited scope of volumetric expansion in exports and remittances in the short-term. It is unfortunate that the portfolio investment also presented a dark picture as it noted a net outflow of $256 million during 8MFY21 compared to an outflow of $26.3m in the same period last year. The State Bank of Pakistan (SBP) data showed that the overall foreign private investment during 8MFY21 dropped by 43% to $1.04 billion compared to $1.83 billion in the same period last year. PIAF vice-chairman Javed Siddiqi said that the Chinese investment remained at the top of the list of countries invested in Pakistan but the inflows from Beijing also dropped to $493 million during 8MFY21 despite the fact that for the last several years China has been the top investor.
While the country is getting extra support from remittances being sent by the overseas Pakistanis, it looks still hard to improve the foreign investments and exports to any significant level. He said despite all-out efforts and incentives, exports grew slowly while foreign investment could see a change once the country exited the FATF grey list. The status quo for international investment for Pakistan has always focused on coal and power but the government should tap into the small, growing sectors, such as technology, to see how it can build a more sustainable economic base. ven in times of crisis.