The government is expecting to receive five billion-dollar foreign direct investment (FDI) by the end of the current fiscal year, Board of Investment (BoI) Secretary Tariq Puri told Business Recorder here on Friday. He said that despite recession in the international market, the country had already received 2.5 billion dollars FDI during the first seven months of the current fiscal.
There were concerns that Pakistan would be unable to attract five billion dollars due to poor law and order situation and the global financial crisis, he said, adding: "If we succeed in realising this figure, it would be greater than what was posted during 2007-08."
The FDI was 5.13 billion dollars in 2006-07 financial year; in 2005-06: 3.51 billion dollars; in 2004-05: 1.524 billion dollars; in 2003-04: 949.4 million dollars; in 2002-03: 798 million dollars; and in 2001-02: 484.7 million dollars. The bulk of this FDI was in the telecom sector.
Investment in textile sector was 24.4 million dollars during July-January 2008-09 as against 17.6 million dollars during the corresponding period of last fiscal, posting an increase of 38.4 percent.
The BoI Secretary admitted: "It is true that the textile sector is facing problems regarding the cost of doing business in Pakistan and its retail sales in the markets of the US and Europe have declined due to the economic recession." He said the textile sector had requested the government to reduce the interest rate in support of industry.
Responding to a question about high interest rates, he said that inflation was the raison d''etre of the ongoing tight monetary policy. However, he stated that the impact of reduced prices of petroleum products would result in a decline in inflation that might eventually ease monetary policy. Puri said that the inflation rate in foreign countries was lower as compared to Pakistan. The lower inflation rate had allowed the foreign countries to follow an expansionary monetary policy that had low interest rates as an integral component.