Requirements for investment

Foreign investment has emerged as a result of integration of the world economy or what is popularly described as "globalisation."
There are many reasons why foreign investment has become a widely discussed topic these days.
One may be as it is a way of using "world's scare resources efficiently. Developing country in this regard have become the point of focus.
Foreign investment has great importance for Pakistan too. As Pakistan is a developing country, so foreign investment can affect Pakistan's economy in several ways.
It can become a channel of transferring advance technology to this country, resulting in stimulation of high productivity on locally-owned firms, especially in the manufacturing sectors.
Pakistan is rich in resources, a land full of opportunities, a gold mine for the investors and a hunting zone for businessmen but still the element of risk is really high. Trust element is shaky, the basic need is to create such atmosphere for the investors which will make them psychologically satisfied.
While considering the foreign investment issue in the context of 11th September incident, which was a turning point for the foreign investment issue.
Till now the impact of the whole situation and Pakistan's role is positive on foreign investment. Afghanistan is one of the most important defining issues in terms of security, domestic politics, ideology and political stability.
Previously the engagement in Afghanistan has been problematic for Pakistan but this time on the one side the incident created a difficult situation for Pakistan yet the involvement in the issue gave Pakistan an opportunity to change her image.
The label of "fundamentalists" has been removed from the Pakistanis and a soft peace-loving anti-terrorist image has been created.
Becoming a part of coalition has not only resulted in removing the sanctions on Pakistan, restructuring of loans but also has opened new avenues for the injection of foreign investment into Pakistan's economy.
The need of the time is to fully avail the opportunity and attract foreign investors. For this purpose some issues that demand immediate attention are.
POLITICAL STABILITY: The Pakistan government has been successful till now to rebuild the image of the country in the eyes of the world by holding elections. However, the general observation is that investors are hesitant to come forward in the military-supervised government. The uncertain element is more in such governments.
SECURITY: Pakistan's history is filled with such actions and decisions (at the public as well as the government level) which have frightened the investors.
The examples may be freezing of foreign accounts and burning outlets of multinational restaurants of KFC and McDonald's by a group of frustrated citizens in Karachi soon after the attack of America on Afghanistan.
Incidents of sectarian killings in Quetta, ongoing operation in the tribal area of Wana, have effected foreign investment drastically. So again the stress is on regaining the trust, ensuring every type of security.
KASHMIR DISPUTE: Although an Afghan government is running the affairs of the country the Kashmir issue remains unresolved. India has started blackmailing Pakistan by making terrorism a base. As the whole world's focus is on eliminating terrorism we should adopt such policies to decrease tension between India and Pakistan.
Solving the Kashmir issue will bring more foreign investment to the country. Using the local as well as foreign media for promoting foreign investment will be helpful.
The relationship of the new Afghan government with Pakistan has a direct impact on foreign investment. Pakistan now cannot afford any more disturbances from Afghan side.
DOMESTIC MARKET: The condition of the domestic market should also be improved. Local investors should be given various types of incentives. Good condition of domestic market will motivate foreign investors to put money in our market. Joint ventures should be promoted.
From 11th September till now foreign investment has increased and it is expected that in suitable circumstances positive results will be seen.