THE spectacle of a number of cabinet ministers at an investment conference in Istanbul last week offers an insight into the current government’s perception of how to fix Pakistan’s problems. Of course, the inseparable duo of the prime minister and deputy PM was there too. The two may well have secured a place in the Guinness World Records for the most world tours undertaken together. They were apparently there to project Pakistan’s potential for foreign investment. No one denies the significance of such conferences for attracting foreign investment critical for economic growth. But the ministers’ presence at every conference will not, on its own, draw investor interest. What matters more is fixing things at home to create the environment and capacity for both domestic and foreign investment. Chaotic governance and inconsistent policies have been a major impediment in the way of any investment coming to the country.
Over the past few years, Pakistan’s top leadership has addressed investment conferences in several regional countries, but there has not been much of a response. In fact, there has been a consistent decline in foreign direct investment. From a peak of $5-6 billion in 2007-08, there have been periods when FDI fell to $0.5bn. For an economy of its size — and being the fifth-largest country by population — that figure is strikingly low. By comparison, Vietnam, with one-third Pakistan’s population, pulls in $15-20bn annually.
