LCCI concerned over sharp decline in FDI

The Lahore Chamber of Commerce and Industry (LCCI) on Tuesday expressed grave concern over sharp decline in foreign invest that fell sharply by 926.6 million dollars, or 66.5 percent, to 466.5 million dollars during July-March 2011-12 as compared to 1.393 billion dollars in the corresponding period of last year.
LCCI President Irfan Qaiser Sheikh in a statement said that rising risk perception about investing into Pakistan was hitting hard the entire economy and needed to be tackled through a comprehensive policy approach by involving Chambers of Commerce in the country.
He said that severest-ever energy shortfall, bad law and order situation, institutional fragility and the political instability were the major factors keeping the foreign investors away. He feared that the fall in Foreign Direct Investment (FDI) was likely to affect adversely the country's economic growth therefore the government should adopt remedial measures to reverse this trend and to attract foreign investment.
At the same time the slow government response to deal with aggravating energy crisis was also spoiling not only the local investment scenario but also sending a very negative signal to potential foreign investors. Irfan Qaiser said that a special committee comprising members of the Parliament, Presidents of Chambers of Commerce and Industry and representatives of Association should be formed to identify the solutions to attract foreign investment that is a prerequisite to economic growth.
He said the proposed committee should also be tasked to look into the existing policy framework and if there was a need to redesign new policies it should immediately initiate work on them. He said all the developed countries accorded special importance to economic issues and the challenges, but in Pakistan the economy was on the bottom of government to-do list.
He said key issues including power shortage, poor infrastructure, law and order situation and other vital factors, should be addressed on priority basis to improve the bleak foreign investment condition to put the country on track of economic growth and development.
"At the same time the government should ensure that all institutions remain immune to any sort of undue interference as this will help improve quality of governance without which foreign investment cannot be attracted", he maintained. The LCCI President said that a number of sectors in Pakistan including infrastructure development, coal, energy, agriculture, livestock, textiles and pharmaceutical offered lucrative investment opportunities to foreign investors but unfortunately due to absence of a proper marketing strategy those opportunities were unattended even that day.