Foreign direct investments in Pakistan? Expected return over investments?

In last three years we have noticed Pakistan has attracted various foreign investments and many joint ventures have started with the cooperation of foreign countries and many foreigners have shown their interest in investing in Pakistan. Pakistan has signed various bilateral investment agreements and taxation treaties. 

Different sectors where Pakistan attracted foreign direct investments are Oil & Gas, Financial Business, Textiles, Trade, Construction, Power, Chemicals, Transport, Communication (IT & Telecom), and others as well. Recently, we have seen great development in sector diversification as Saudi ‘Edupreneur’ is interested in investing in Pakistan’s education sector. 

As per official statistics (Government of Pakistan’s data) in the fiscal year 2019 to 2020 foreign direct investment (net) has reached 2.56 billion dollars which is the height in the last whole decade’s FDI. In 2009-2010 Pakistan has received an investment of 2.15 billion dollars which was peak at that time but recently this investment has touched sky heights with more than what was invested in 2009 and 2010. 

This rise in FDI’s is definitely due to the Government of Pakistan’s initiative and hard work to develop and maintain infrastructure and environment which keep on attracting FDI’s and should be invested in all potential sectors which could generate a good return on investment and uplift all underperforming or potentially excellent performing sectors. 

Recently, it has been observed significant investments have been received in the power sector and IT & telecommunication sector which is more than main Oil & Gas and Financial Business sectors, reasons are Pakistan is going through rising in demand of power and telecommunication due to various launch of mobile companies, increased sell of telecommunication sims, huge demand of mobile lines, etc. Other than this due to large and heavy consumption of power in every industry be it textile, construction, manufacturing, households and the recent introduction of electric vehicles has increased demand for power and electricity to meet this government has initiated developing grid sectors which can provide non-stop electricity to individual consumers and manufacturing units as well. 

Now, will Pakistan would have desired return over investment? The answer is yes, as current government is completely taking all measures to keep and maintain peaceful environment in Pakistan so that started projects could reach to completion and become beneficial for public and stakeholders as well. 

Besides, with initiatives related to well-developed infrastructure Pakistan has also dealt with situations where there were attempts to demoralize peace initiative inland, political differences, call for shutting down businesses and on top Covid 19 which has affected strongest of economies but still Pakistan has observed highest FDI’s in 2019-2020 in throughout last decade.  This shows constant, committed, and stable efforts by GOP not just to attract international investments in fact provide them promising returns and growth to local and international units present in Pakistan which has been dormant or underperforming for decades. Such initiatives include restructuring of public entities, starting new projects, promoting tourism, education sector, develop scientific research centers, hospitals and medical units.