The Foreign direct investment; net (BoP; US dollar) in Pakistan was last reported at 1970000000.

00 in 2010, according to a World Bank report released in 2011. The Foreign direct investment; net (BoP; US dollar) in Pakistan was 2267000000.00 in 2009, according to a World Bank report, published in 2010. The Foreign direct investment; net (BoP; US dollar) in Pakistan was reported at 5389000000.00 in 2008, according to the World Bank. Foreign direct investment is net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows total net, that is, net FDI in the reporting economy from foreign sources less net FDI by the reporting economy to the rest of the world. Data are in current U.S. dollars.This page includes a historical data chart, news and forecasts for Foreign direct investment; net (BoP; US dollar) in Pakistan. Pakistan's economy has suffered in the past from decades of internal political disputes, a fast growing population, mixed levels of foreign investment, and a costly, ongoing confrontation with neighboring India. However, IMF-approved government policies, bolstered by foreign investment and renewed access to global markets, have generated solid macroeconomic recovery during the last decade

FDI By Atif Noor Khan

Opportunities

in

Pakistan

Foreign Direct Investment (FDI) and encouragement of investors is the need of the hour for the elimination of poverty and unemployment keeping this in views Pakistan aims to attract foreign investment worth five billion dollars this year, but needs to tackle reform, maximize anemic growth and stem rampant violence to clinch its ambitious target. What is interesting or rather fortunate to note is that currently Pakistan is bent more towards reaping the favorable side of the FDI inflows. Though increased foreign inflows in the recent months have expanded the reserve money growth, the benefits of these inflows cannot be ignored. Pakistan is one of few countries blessed with lot of untapped coal, wind, hydro and solar energy potential and many countries are keen to help Pakistan fully exploit these resources. Pakistan is an important and strategic country in South Asia and its growth and development has far reaching implications for the Asian region in general and the South Asian region in particular. Foreign business and industrial houses have confirmed their plans to continue to invest in Pakistan despite certain difficulties. These difficulties relate to an uncertain law and order situation on the back of terrorist activities in the countrys western region. But, seventy-four per cent of the foreign investors already operating in Pakistan are interested in going ahead with new investments over the next two years and beyond. Pakistan though facing several challenges offers vast opportunities of investment. In Pakistan foreign investors are permitted to hold 100% of the equity in industrial, agriculture, horticulture, livestock, service, infrastructure and social sectors (subject to certain conditions) on repatriable basis. Moreover, no government sanction is required for setting up an industry in terms of field of activity, location and size except in case of four sectors relating to national security. Under the deregulation policy, government controls on business activity are being relaxed even further. To avoid double taxation on income earned by foreign investors, Pakistan has already concluded agreements with 51 countries that include nearly all the developed economies. As a result of these proactive policies, the FDI increased by more that 900% in the past six years. It crossed the USD 1 billion mark in FY 04 and is set to cross the USD 4 billion mark in the current fiscal year. Total FDI inflows for the first nine months of the current fiscal year stand at USD 3.86 billion which is 72% higher than the amount of USD 2.24 billion for the corresponding period of the last fiscal year. Nearly half of these FDI inflows were a result of proceeds from the sale of state enterprises while the financial services sector, telecommunications and the energy sector remained the primary recipients of the bulk of FDI. The Government of Pakistan assigns a vital role to private foreign investment in the development of its economy. The Government welcomes foreign investment and has consistently followed liberal policy towards it. The attitude of the Government towards foreign investment is worth to appreciate. Pakistan is fully safe for investment and its growth. In Pakistan the investment policy is very friendly towards local as well as foreign investors and countries all our the world can plan to boost their investments here. FDI has been recognized the most powerful and strategic weapon for transforming a traditional economy of a nation into a modern economy by accelerating the pace of growth and development. There have been many examples wherein the FDI inflows have boom red the economies of many countries. For example,

China and South Korean economies have transformed their respective economies into major destinations for FDI and through FDI inflows they have emerged as faster growing economies in the world. Similarly, the Indian economy has also been trying hard to attract FDI to transform its economy into an emerging growing economy. Hence the question does arise why not Pakistan make use of FDI as a vehicle for transforming its economy into an accelerated economy in the world. The government has successfully introduced a wide range of incentives, congenial for local and foreign investors and has increasingly tended to turn to FDI as a source of capital, technology, managerial skills and market access needed for sustained economic development. The outward orientation in policies designed by the government to attract more FDI has been accompanied by the adoption of policies relating to privatization and deregulation of economic activity, offering unprecedented and conducive business environment to all multinational corporations. According to the BoI, there are bright prospects for FDI inflows to Pakistan. This is because the government of Pakistani has successfully created both macro and micro business environment in the country.

Impact of FDI on Indian Economy

India has recently liberalized its FDI policy and decided to allow 100 percent international investment in the single brand retail segment. Reforms to industrial policies have brought about significant reductions to requirements regarding to licensing and done away with restrictions related to expansion and made it easy to use international technology. The real estate sector has performed well in recent times and much of the credit in this instance can be given to the relaxed FDI regulations and the properly performing economy. The Indian government has been trying hard to do away with the FDI caps for majority of the sectors but there are still critical areas like retailing and insurance where much thought needs to be given before more FDI is allowed. India is the 3rd biggest economy of the world in terms of purchasing power parity and is thus a popular destination when it comes to FDI. Following are the major economic sectors where it can attract investment:

telecommunications apparels information technology pharmaceuticals auto components jewelry chemicals

Foreign investments in India have increased of late but the strict FDI policies have impeded the possible growth in this sector. India is however set to become one of the major recipients of FDI in the Asia-Pacific region because of the economic reforms for increasing foreign investment and the deregulation of this important sector. India has technical expertise and skilled managers and a growing middle class market of more than 300 million and this represents an attractive market.

FDI Inflows in India

The table provides a list of countries that are the leading foreign direct investors for India:
Country Mauritius Singapore USA UK Netherlands Approximate percentage of inflow 42 9 7 5 4 Approximate inflow in million US dollars 50164 11275 8914 6158 4968

As the table shows, within 2000 and 2010 India has attracted FDI worth 178 billion dollars. Majority of the foreign direct investment comes through Mauritius as it enjoys several tax advantages, which works well for the international investors.

India and Mauritius have also signed a tax avoidance treaty and the African country provides several capital gains tax privileges to companies that operate from its territory. This effectively makes it a preferred medium as there is no taxation when it comes to FDI.

Union Government FDI Measures

The Union Government has allowed 100 percent FDI in cash and carry wholesale trade sector apart from the single brand retail market. It has also opted to allow 51% FDI in the multi brand retail segment. However, this will be implemented in accordance to certain predetermined conditions. At present, it is trying to come to a consensus on this matter with the various state governments.

FDI Equity Inflows from 2000-2012 S. Nos Financial Year (April March) Amount of FDI Inflows In crores 10733 18654 12871 10064 14653 24584 56390 98642 142829 123120 88520 122307 723367 ` In million 2463 4065 2705 2188 3219 5540 12492 24575 31396 25834 19427 26192 160096 ( + ) 65 % ( - ) 33 % ( - ) 19 % ( + ) 47 % ( + ) 72 % (+ )125 % ( + ) 97 % ( + ) 28 % ( - ) 18 % ( - ) 25 % US$ %age growth over previous year (in terms of US $)

FINANCIAL YEARS 2000-2012 1 2 3 4 5 6 7 8 9 10 11 12 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 * 2009-10 # 2010-11 # 2011-12 # (April - January 2012)

CUMULATIVE TOTAL (from April 2000 to January 2012)

Note:

(i)

including amount remitted through RBIs-NRI Schemes (2000-2002). (ii) FEDAI (Foreign Exchange Dealers Association of India) conversion rate from rupees to US dollar applied, on the basis of monthly average rate provided by RBI (DEAP), Mumbai. (iii) Variation in equity inflows reported in above Table II-A & II-B for 2006-07, 2007-08, 200809, 2009-10 & 2010-11 is due to difference in reporting of inflows by RBI in their monthly report to DIPP & monthly RBI bulletin. (IV) # Figures for the years 2009-10, 2010-11 & 2011-12 are provisional subject to

reconciliation with RBI. (V) * An additional amount of US$ 4,035 million pertaining to the year 2008-09, since reported by RBI, has been included in FDI data base from February 2012

Japan with world

Value of Computer Exports from Individual East Asian Countries and Regions to the World