Foreign investment in Pakistan drops by 22 per cent

[Metallic]

Foreign investment drops by 22 per cent
PAKISTAN - 17 MAY 2010

KARACHI: Net foreign investment in Pakistan fell 22 per cent to $1.73 billion in the first 10 months of the fiscal year 2009-10, compared with $2.21 billion in the same period last year, the Central bank said on Monday.
Out of the total foreign investment, foreign direct investment (FDI) fell 44.7 per cent to $1.77 billion in the July to April period, from $3.20 billion in the same period last year.

A worsening security situation, coupled with chronic power shortages, have put off investors, analysts said.

There was a net outflow of $46.6 million of foreign portfolio investment in the first 10 months of this (July-June) fiscal year, compared with a net outflow of $992.6 million in the same period last year.

Authorities imposed a floor on the Karachi Stock Exchange benchmark index in August 2008 as political uncertainty and economic and security worries drained investors’ confidence.

The floor discouraged new investment and also led to a sharp outflow of funds, as foreign investors sold holdings in off-market trade. The floor was removed in December 2008. — DawnNews


Source: Dawn Media Group

 

[Evil Flare]

i think 1 Day i will read the news like this


1000 Rs in FDI in Pakistan this month

 

[Hyde]

i think 1 Day i will read the news like this


1000 Rs in FDI in Pakistan this month

no there has been major security improvements in Pakistan recently. If all goes well i am hoping 5-10 billion dollars per month after couple of years (Insha'Allah)

 

[Windjammer]

Else where i read that Over seas Pakistani Nationals have sent record remittance back home, which goes to prove that despite all the shortcomings, Pakistanis in touch with ground realities are content with the security situation back home.

 

[Creder]

My dad is opening a new company, he had his contacts in India who provided all the services for his other contracts at much cheaper costs..he did that for like six months, in the end just out of patriotism he is shifting all his buisiness to pakistan..and that would cost him half his profits but still he'll be giving jobs to ten engineers

so dont look at these news..times are tough but we are tougher

 

[TechLahore]

This reduction is completely immaterial. There has been only a $500M reduction in FDI, while at the same time, the forex remittances being received from Pakistanis abroad have gone up tremendously, showing an increase of almost $1B.

Pakistan's forex reserves have been rising. The entire IMF assistance accounts for significantly less than reserves, thus indicating that the net positive increases in reserves have been caused by things other than the IMF inflows.

Remittances rise over 21pc to $5.2b | Pakistan | News | Newspaper | Daily | English | Online

Remittances rise over 21pc to $5.2b
Published: February 11, 2010
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KARACHI - The remittances sent home by overseas Pakistanis continued to show a rising trend as an amount of $5,198.13 million was received in the first seven months (July-January) of the current fiscal year 2009-10, showing an increase of $920.82 million or 21.53 per cent over the same period of the last fiscal year.
The amount of $5,198.13 million includes $0.99 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs), SBP said on Wednesday.
According to SBP, in January 2010, an amount of $667.90 million was sent home by overseas Pakistanis, up 4.80 per cent or $30.60 million, when compared with $637.30 million received in the same month last year.
The inflow of remittances in the July-January, 2010 period from UAE, USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1,180.29 million, $1,061.89 million, $999.41 million, $737.72 million, $550.35 million and $157.93 million respectively as compared to $868.93 million, $1,029.03 million, $838.66 million, $690.30 million, $289.96 million and $131.74 million respectively in the July-January, 2009 period. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first seven months of the current fiscal year amounted to $509.52 million as against $428.30 million in the same period last year.
The monthly average remittances for the July-January 2010 period comes out to $742.59 million as compared to $611.04 million during the same corresponding period of the last fiscal year, registering an increase of 21.53 percent.
During last month i.e. January 2010 remittances from UAE, Saudi Arabia, USA, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $158.33 million, $153.50 million, $123.49 million, $95.27 million, $67.56 million and $15.14 million respectively as compared to $169.50 million, $123.76 million, $125.54 million, $93.76 million, $50.14 million and $20.33 million in January 2009. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during January 2010 amounted to $54.62 million compared with $54.25 million in the same month last year.

It may be pointed out that the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis had undertaken a joint initiative called ‘Pakistan Remittance Initiative (PRI)’ recently with a view to facilitating the flow of remittances through formal channels. This initiative has started to materialize and remittances through formal channels are showing considerable growth.

 

[Creder]

@tech one problem tho mayn, i dunno i might be wrong on this but things in Pakistan arent that favorable for pakistanis living abroad..They can do a lot for the country if they are properly facilitated

Off-topic: Im sorry to mention this here again lol but my dad he had these contractors from Pakistan build a database for one his friend's companies..Those guys they put some bug in it or what-not so that it crashed after like 6 months, they only did that so that the company would go back to these guys to fix it and they were charging for that :S

 

[jagjitnatt]

This reduction is completely immaterial. There has been only a $500M reduction in FDI, while at the same time, the forex remittances being received from Pakistanis abroad have gone up tremendously, showing an increase of almost $1B.

Pakistan's forex reserves have been rising. The entire IMF assistance accounts for significantly less than reserves, thus indicating that the net positive increases in reserves have been caused by things other than the IMF inflows.

Remittances rise over 21pc to $5.2b | Pakistan | News | Newspaper | Daily | English | Online

Remittances rise over 21pc to $5.2b
Published: February 11, 2010
Print Facebook Digg StumbleUpon Text Size
KARACHI - The remittances sent home by overseas Pakistanis continued to show a rising trend as an amount of $5,198.13 million was received in the first seven months (July-January) of the current fiscal year 2009-10, showing an increase of $920.82 million or 21.53 per cent over the same period of the last fiscal year.
The amount of $5,198.13 million includes $0.99 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs), SBP said on Wednesday.
According to SBP, in January 2010, an amount of $667.90 million was sent home by overseas Pakistanis, up 4.80 per cent or $30.60 million, when compared with $637.30 million received in the same month last year.
The inflow of remittances in the July-January, 2010 period from UAE, USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1,180.29 million, $1,061.89 million, $999.41 million, $737.72 million, $550.35 million and $157.93 million respectively as compared to $868.93 million, $1,029.03 million, $838.66 million, $690.30 million, $289.96 million and $131.74 million respectively in the July-January, 2009 period. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first seven months of the current fiscal year amounted to $509.52 million as against $428.30 million in the same period last year.
The monthly average remittances for the July-January 2010 period comes out to $742.59 million as compared to $611.04 million during the same corresponding period of the last fiscal year, registering an increase of 21.53 percent.
During last month i.e. January 2010 remittances from UAE, Saudi Arabia, USA, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $158.33 million, $153.50 million, $123.49 million, $95.27 million, $67.56 million and $15.14 million respectively as compared to $169.50 million, $123.76 million, $125.54 million, $93.76 million, $50.14 million and $20.33 million in January 2009. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during January 2010 amounted to $54.62 million compared with $54.25 million in the same month last year.

It may be pointed out that the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis had undertaken a joint initiative called ‘Pakistan Remittance Initiative (PRI)’ recently with a view to facilitating the flow of remittances through formal channels. This initiative has started to materialize and remittances through formal channels are showing considerable growth.

Though the money entering Pakistan remains pretty much the same but there is a lot of difference between foreign investment and remittances.

The remittances are going to Pakistani citizens, who will most probably save it. On the other hand, foreign investments go into projects, and programs that would directly affect the economy of the nation. Also since these are investments, returns are expected. So indirectly these programs have to be commercially successful in order to lure the investors.

Remittances don't benefit the country, unless people spend it in the right place. Foreign investments directly go into economy building elements.

 

[TechLahore]

remittances are not "saved" in bank accounts where they are left untouched. they typically go to purchase khaas deposits, which is money directly going to the government, or they are invested in land (very typical), real-estate in general and stocks. whatever is left is spent, thus re-entering the economy through product purchases.

 

[SMC]

Wait, wasn't FDI already at $1.5B? How can it fall to 1.7 B?

 

[keeninterest]

Though the money entering Pakistan remains pretty much the same but there is a lot of difference between foreign investment and remittances.

The remittances are going to Pakistani citizens, who will most probably save it. On the other hand, foreign investments go into projects, and programs that would directly affect the economy of the nation. Also since these are investments, returns are expected. So indirectly these programs have to be commercially successful in order to lure the investors.

Remittances don't benefit the country, unless people spend it in the right place. Foreign investments directly go into economy building elements.

remittances are not "saved" in bank accounts where they are left untouched. they typically go to purchase khaas deposits, which is money directly going to the government, or they are invested in land (very typical), real-estate in general and stocks. whatever is left is spent, thus re-entering the economy through product purchases.

Jagjit has a point when he talks about roi, and the critical component to be looked into is the over all benefit and return a rupee generates at the end of the day and from practices followed it is very clear the roi on a rupee spent via fdi will any day certainly be more than the roi generated through other means which can be attributed to high rate of corruption, high skill sets used when fdi drops in as compared to otherwise, pilferage, low scale and coverage of private enterprise in pakistan which would possibly hold a better chance of roi as compared to when the GoP spends the same money, a part of this money when circulated in the economy will be used in the working of various schemes which are targeted to social security where roi is negligible, and this in no way is a Pakistan specific thing but happens all around, so the returns expected through fdi and remittance that ends up in the banking system and then used in no way can be compared, the difference is sky high!

Though Jagjit there is one issue you need to look at while addressing this issue, and that is when the savings rate goes up, as will happen when remittance grows and as has been pointed by you, the investment rate as a % to gdp goes up, so it in no way means the money coming in ends up as a dead investments. Benefits are there but not proportional.

 

[I FLY HIGH]

Jagjit has a point when he talks about roi, and the critical component to be looked into is the over all benefit and return a rupee generates at the end of the day and from practices followed it is very clear the roi on a rupee spent via fdi will any day certainly be more than the roi generated through other means which can be attributed to high rate of corruption, high skill sets used when fdi drops in as compared to otherwise, pilferage, low scale and coverage of private enterprise in pakistan which would possibly hold a better chance of roi as compared to when the GoP spends the same money, a part of this money when circulated in the economy will be used in the working of various schemes which are targeted to social security where roi is negligible, and this in no way is a Pakistan specific thing but happens all around, so the returns expected through fdi and remittance that ends up in the banking system and then used in no way can be compared, the difference is sky high!

Though Jagjit there is one issue you need to look at while addressing this issue, and that is when the savings rate goes up, as will happen when remittance grows and as has been pointed by you, the investment rate as a % to gdp goes up, so it in no way means the money coming in ends up as a dead investments. Benefits are there but not proportional.

Look my dear , First fdi is very important for a country, its falling down is a negative sign but for me the trust of the pakistanis in their own country is more important. The rimitances play a vital role in improving the balance of payments etc. FDI depends on the major mega projects , now the mega projects are going to be launched e.g BHASHA DAM is to be launched next month worth 8 billion dollars, bunji dam is to be launched in 2013/2014. 1000 mega watts thar coal project to be started next year. As you see these are the mega projects which actually brings the fdi. I am sure the fdi and remittances both will be the positive factors for Pakistan in the near future.

 

[Hyde]

Look my dear , First fdi is very important for a country, its falling down is a negative sign but for me the trust of the pakistanis in their own country is more important. The rimitances play a vital role in improving the balance of payments etc. FDI depends on the major mega projects , now the mega projects are going to be launched e.g BHASHA DAM is to be launched next month worth 8 billion dollars, bunji dam is to be launched in 2013/2014. 1000 mega watts thar coal project to be started next year. As you see these are the mega projects which actually brings the fdi. I am sure the fdi and remittances both will be the positive factors for Pakistan in the near future.

Good optimist post
I liked it

 

[Gin ka Pakistan]

But foreign remittance have gone up 13%.

 

[Gin ka Pakistan]

Without peace in the country foreign investment will go down. WOT has effected Pakistan up to 50 billion $ and then when Pakistan ask for help its label as begging.