This is apropos a BR Research analysis “FDI keeps falling…” carried by the newspaper yesterday. According to it, “the FDI needle is not moving in Pakistan. The foreign investment has continued its declining trend with 4MFY22 net FDI standing 12 percent year-on-year lower led by a 23.7 percent rise in outflows and 3 percent year-on-year decline in inflows”. That FDI highly critical to developing countries’ external financial sources is a fact. It is also a fact that it (FDI) crowds in and crowds out domestic investment in developing countries. This fact brings home the criticality of domestic investment as well. Strong domestic investment can be a catalyst for FDI. There is therefore a strong need for formulating investment promotion policies that are directed towards domestic companies because such firms could help attract foreign investors as well in an efficient manner.

Sana Shaukat (Karachi)

Copyright Business Recorder, 2021