KARACHI: With 53 per cent inflows from China, the FDI increased by just 10 per cent during the first 11 months (July-May) of 2015-16. However, the China-Pakistan Economic Corridor (CPEC) project is yet to attract foreign direct investment (FDI) in a big way.
The details of the FDI data released by the SBP showed that many countries which invested in Pakistan slashed their investment or disinvested during the outgoing fiscal year.
The FDI during the 11 months period reached $1,083 million compared to $980m during the same period of last year.
The government placed the CPEC project on top of its economic agenda, but data indicates that dependence of the country on China has been increasing, while the rest of the world withdrew or restricted their investment.
The US invested $72m during the July-May period against $197m same period last fiscal year.
The UK invested $150m in 11 months of last fiscal year but this year the FDI dropped to $65.7m. Similarly, Japanese investment fell to $20m from $69m during the same period of last fiscal year.
The FDI from UAE fell to $151m compared to $207m of last fiscal year. Saudi Arabia kept disinvestment like previous year as disinvestment from the country rose to $91.6m compared to $59m of the previous year.
Pakistan has been struggling to attract FDI, but results so far are disappointing. If one excludes Chinese investment from the total, the FDI is even less than last year.
Excluding Chinese investment, Pakistan received just $512m from rest of the world during the 11 months of this fiscal year while it received $746m (excluding $234 Chinese FDI) in the same period of last fiscal year.
According to the State Bank report, the overall private investment, including portfolio investment, fell by 62pc. The portfolio investment shows net outflow of $381m during this period of the current fiscal year while the country witnessed net inflow of $875m.
Independent economists found it serious that FDI has been decreasing despite the fact that China has doubled its investment in Pakistan.
While exports have been declining, Pakistan’s dependence on remittances has increased but growth in this sector is not encouraging. The growth in remittances was just 6pc during the 11 months.
Pakistan expects to receive much higher FDI from China during the next fiscal year under the agreement of $46bn.
However, experts indicated that Pakistan should do the best to attract foreign investment.
A leading analyst said Tajikistan has announced to participate in the CPEC which is good but the money would not come to Pakistan.