To attract portfolio investment in Pakistan, the government is merging the Foreign Investment Promotion Policy (FIPP) into the upcoming 'Investment Policy 2010-15'. Sources told Business Recorder on Tuesday that as the capital market development is an essential pillar of a broader investment policy, hence FIPP is linked to the policy.
They said that the country's poor law and order situation apart, the government is also confronting several economical issues including lowest GDP growth rate, high inflation, increasing unemployment ratio, etc. Therefore, Pakistan is in much need of foreign investment to achieve sustainable growth.
They said the draft of a five-year 'Investment Policy 2010-15' has been finalised, which would hopefully be announced next year to attract foreign investors in particular and locals in general. According to preliminary version of the policy, local and foreign investors would be treated equally, and they would not require any prior approval from the government regarding investments.
They said that the policy would aim at encouraging entrepreneurial investments, while the FIPP would attract foreign direct investment (FDI), beside inviting portfolio investment, to develop the country's capital market. Sources said that the upcoming policy would also set out targets, outline lines of activities of the Board of Investment (BoI), and would also address the capacity building challenges for carrying out envisaged activities.
They said that this would be the first time when the government would be paying heed to evolving a policy in this regard, which would play a vital role in mobilising both domestic and foreign investments in the country. They said that it would also engage the Privatisation Commission and Infrastructure Project Development Facility (IPDF) to facilitate investors in projects. They said that the concerned authority has prioritised institutionalisation of public-private policy dialogue to set stage for a stable and consistent investment-friendly reform process, besides strengthening the investment protection.
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