KARACHI: Pakistan’s foreign direct investment (FDI) witnessed a slump of 45% in the month of February, the central bank data showed, with the Overseas Investors Chambers of Commerce & Industry (OICCI) pointing to the reluctance of investors to park their money in a country where “policies remain mostly inconsistent and businesses over-regulated.”
Pakistan’s government is working hard to convince foreign countries, including China, Saudi Arabia and United Arab Emirates as well as multinational firms, to invest in its mineral, agriculture, information technology and other sectors under the banner of the Special Investment Facilitation Council (SIFC), a civil-military forum.
The South Asian country of more than 240 million people, however, could only attract $95 million FDI in February compared with $172 million in the same month last year, according to the State Bank of Pakistan (SBP) data. Pakistan’s total FDI inflows in the first eight months of this fiscal year (Jun. 2024-Feb. 2025) stood at $1.62 billion.
“We lack consistency in our policies. Though political uncertainty is also important, policies that keep facing sudden changes, matter more,” said M. Abdul Aleem, chief executive officer of the Overseas Investors Chambers of Commerce & Industry (OICCI), told Arab News.
The OICCI is the oldest chambers of South Asia which represents more than 200 multinational companies operating in Pakistan. Some of its prominent members include Citibank N.A., Coca-Cola Beverages Pakistan Ltd., Akzo Nobel Pakistan Ltd., Toyota’s Pakistan unit Indus Motor Company Ltd., Mitsubishi Motors Corporation and Maersk Pakistan (Pvt.) Ltd.
In the past decade, Aleem said, his chamber had reinvested more than $22 billion in Pakistan, compared with $19.8 billion the country attracted on account of FDI from new projects, including the China-Pakistan Economic Corridor (CPEC).
“About 100 billion rupees of tax refunds of our member companies are stuck (with the government),” said the OICCI official, who has an extensive portfolio of leadership positions in Exxon Chemicals, Engro Corporation and the British American Tobacco Group UK.
Pakistan saw the departure of some large multinational companies in recent years.
TotalEnergies sold its 50% shareholding in Total PARCO Pakistan Limited to commodities giant Gunvor Group last year in August, while Shell Petroleum Company Limited signed an agreement with Wafi Energy LLC of Saudi Arabia to sell its majority stake in the Pakistan business in Nov. 2023.
“You saw some oil companies leaving Pakistan recently. Shell left, Total Parco left. They left because of all these factors that kept building up for years,” Aleem said.
“Many pharmaceutical companies shrank their businesses in Pakistan after the government started controlling the prices of medicines,” he said, without naming the firms.
Aleem cited Pakistan’s recently introduced refinery policy as an example that was “hurting” investor sentiment as a sudden change in the relevant tax laws made the deal “unviable” for companies.
“The foreign investors look at all these things and get upset. Good or bad you make a policy at once and do not change it,” he explained.
Pakistan faces a balance of payment crisis time and again and should therefore incentivize exports-oriented businesses that could invest their money in the country and export what they produce, according to the OICCI official.
“IT was one such area where the potential was very high. But then you see what sort of problems the Internet speed is facing,” he said.
Pakistan, a country of over 240 million, has witnessed up to 40% drop in Internet speeds in the last few months, according to the Wireless and Internet Service Providers Association of Pakistan (WISPAP). The drop came as the government last year moved to implement a nationwide firewall to block malicious content and protect government networks from cyberattacks, with IT associations saying the slowdowns have resulted in significant losses.
The OICCI secretary general said the government should activate the Board of Investment (BoI) to facilitate foreign investors through a one-window operation.
“The SIFC must be doing a good job but it is the Board of Investment’s job. If a foreign investor would deal with the army what impression would he get,” he said.
Pakistan constituted the SIFC, a civil-military body, in June 2023 to attract international investment in agriculture, energy, livestock, tourism, mining and minerals, and other priority sectors, amid an economic meltdown. The South Asian country averted a default that year, thanks to a $3 billion International Monetary Fund (IMF) program, and is currently navigating a path to economic recovery under another $7 billion IMF bailout.
Last week, Pakistan’s finance adviser Khurram Schehzad said the government was actively working to attract efficient, export-driven FDI to strengthen Pakistan’s economic foundation. But the country’s volatile security situation and the cash-strapped government’s revision of mid-stream unilateral contracts are further deteriorating the situation.
Kaiser Bengali, a Karachi-based development economist, said the SIFC was an ad hoc body which was working without having any “constitutional basis.”
“It is here today, gone tomorrow. Investors need certainty,” he said.
Bengali said Pakistan’s macroeconomic framework over the last four decades was geared to promote wealth generation via speculation in the stock market, real estate and under-invoicing of imports, rather than investment in productive sectors like manufacturing.
“Thus, foreign funds flow as short-term portfolio investment,” he said. “Thus, there is little incentive for serious FDI.”
Pakistan foreign direct investment declined 45% in Feb year on year, data shows
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Pakistan foreign direct investment declined 45% in Feb year on year, data shows
- Pakistan received $95 million FDI inflows last month, compared to $172 million in Feb. 2024
- Overseas chamber says multinational companies leaving Pakistan due to ‘inconsistent policies’
Pakistan stocks increase 4 percent month-on-month on IMF staff level deal — analysts
- IMF this week reached deal for new $1.3 billion arrangement, first review of ongoing bailout program
- Pakistan can unlock $1.3 billion under new climate resilience loan program spanning 28 months
ISLAMABAD: Pakistani stocks increased by 4 percent on a month-on-month basis on the back of a successful staff level agreement with the International Monetary Fund, among other factors, top brokerage house Topline Securities said in a monthly market review on Friday.
On Tuesday, IMF staff reached a deal with Pakistan for a new $1.3 billion arrangement and also agreed on the first review of the ongoing 37-month bailout program. Pending board approval, Pakistan can unlock the $1.3 billion under a new climate resilience loan program spanning 28 months. The IMF will also free $1 billion for the South Asian nation under its $7 billion bailout program, which would bring those disbursements to $2 billion.
The program, secured mid-year in 2024, has played a key role in stabilizing Pakistan’s economy and the government has said the country is on course for a long-term recovery.
“KSE 100 Index increased by 4 percent on MoM basis, this gain can be attributed to staff level agreement with IMF, circular debt resolution plan where news flow suggest that significant progress has been made and noise that government is working on plan to reduce the electricity prices,” Topline Securities said in its review.
Plugging unresolved debt across the power sector is a top priority under the ongoing IMF bailout, which has helped Pakistan dig its way out of an economic crisis.
Pakistan’s government, the largest shareholder or owner of most power companies, faces a challenge in resolving debt due to fiscal constraints. To address this, Islamabad has raised energy prices, as recommended by the IMF, but still needs to settle the accumulated debt.
The government plans to reduce “circular debt” — public liabilities that build up in the power sector due to subsidies and unpaid bills — this year by eliminating government-guaranteed debt and moving to a revenue-based system.
This approach is expected to lower financing costs, enabling the government to pay off interest and service debt obligations, the power ministry said earlier this month.
Other major developments during this month have been the inflation rate for February coming in at 1.5 percent, the lowest reading in nearly a decade. The monetary policy committee also kept the policy rate unchanged at 12 percent, while the remittance figure for the month of February 2025 clocked in at S$3.1 billion, up 39 percent YoY and 4 percent MoM.
Pakistan’s inflation is likely to remain steady in March, in the 1 percent to 1.5 percent range, the country’s finance ministry said in its monthly economic outlook, after slowing to its lowest level in almost a decade the previous month.
Inflation in Pakistan has been declining for several months after it soared to around 40 percent in May 2023.
Pakistan says its $350 billion economy has stabilized under the $7 billion IMF bailout that had helped it stave off a default threat.
“While economic growth remains moderate, inflation has declined to its lowest level since 2015, financial conditions have improved, sovereign spreads have narrowed significantly, and external balances are stronger,” the IMF said about Pakistan.
Islamabad had been awaiting the IMF agreement on the first review of the bailout and disbursement of $1 billion ahead of the country’s annual budget, usually presented in June.
The IMF statement also noted what it called elevated downside risks such as geopolitical shocks to commodity prices, tightening global financial conditions, or rising protectionism.
It said such risks could undermine Pakistan’s “hard-won macroeconomic stability.”
Pakistan army says 11 militants killed in four operations in northwest
- Pakistan is battling spike in attacks by indigenous chapter of Taliban movement, known as Tehreek-e-Taliban Pakistan
- Islamabad says militants use safe havens in Afghanistan to carry out cross-border attacks, a charge Kabul denies
ISLAMABAD: Eleven militants were killed in four operations in the northwestern Khyber Pakhtunkhwa province, the Pakistan army said on Thursday night, amid a surge in attacks across the country.
Pakistan is battling a spike in attacks by an indigenous chapter of the Taliban movement, known as Tehreek-e-Taliban Pakistan, on police and military in areas near the Afghan border. The military has been conducting near-daily operations against militants, especially in the northwestern Khyber Pakhtunkhwa and southwestern Balochistan provinces.
Islamabad says militants use safe havens in Afghanistan to carry out cross-border attacks, a charge Kabul denies.
“On 26-27 March 2025, eleven Khwarij [militants] were killed by the security forces in four separate engagements in Khyber Pakhtunkhwa Province,” the army said in a statement.
Two intelligence-based operation was conducted in Mir Ali in North Waziristan District, with eight militants killed. Two more were killed in Miran Shah while one was killed in a fourth operation in Dera Ismail Khan District.
“Weapons and ammunition were also recovered from the killed khwarij, who remained actively involved in numerous terrorist activities,” the army said.
“Sanitization operations are being conducted to eliminate any other kharji found in the area as the security forces of Pakistan are determined to wipe out the menace of terrorism from the country.”
PM Sharif says Huawei’s program to train 300,000 Pakistanis will boost exports, generate jobs
- Pakistan, Huawei last year signed agreement to train 300,000 Pakistanis in information and communication technologies
- Program, scheduled to conclude by the end of 2025, will see 60,000 Pakistanis receive high-tech training, says state media
ISLAMABAD: Prime Minister Shehbaz Sharif this week said Chinese multinational technology company Huawei’s program to train 300,000 Pakistanis will generate employment in the country and boost its exports, state-run media reported.
Pakistan and Huawei last year signed an agreement to train 300,000 Pakistani youths in information and communication technology (ICT) skills to match international standards. Huawei is providing training to Pakistani youth in artificial intelligence (AI), cybersecurity, cloud computing and other advanced technologies under the initiative.
The Pakistani prime minister met a five-member delegation of the company, headed by its Chief Executive Officer Ethen Sun on Thursday, state broadcaster Radio Pakistan reported.
“Shehbaz Sharif said the government seeks a solid and long-term partnership with Huawei,” it said. “He highlighted that Huawei’s ICT training program will not only boost IT exports but will also help create employment opportunities for youth.”
Sharif’s office said earlier this month that Huawei has trained over 20,000 Pakistanis under the program. He was briefed by the delegation that 240,000 youths will receive basic training while 60,000 will undergo high-tech training under the initiative.
“The training is expected to be completed by the end of this year,” Radio Pakistan said.
The state media said Huawei has additionally, in collaboration with the Higher Education Commission, introduced courses in AI, cloud computing, big data and cybersecurity in 15 Pakistani universities.
Pakistan views ICT as a driver of economic change and seeks to transform the sector into a cornerstone of its strategy for financial stability, courting foreign investment from countries like China and the Gulf states.
In its bid to generate more jobs countrywide, Sharif launched the Digital Youth Hub portal in Islamabad on Thursday.
The initiative will connect young people to jobs, educational opportunities and enhance skills development in the country.
Sharif’s government has repeatedly spoken of putting Pakistan on the track to economic recovery by increasing its exports. In its economic transformation plan issued this year, the government says it hopes to achieve $60 billion in exports in the next five years.
Pakistan PM launches ‘Digital Youth Hub’ to enhance employment, educational opportunities
- Digital Youth Hub platform connects young people to jobs, educational and skills development programs
- Estimates suggest approximately 64 percent of Pakistan’s population is under the age of 30 years
ISLAMABAD: Prime Minister Shehbaz Sharif launched the “Digital Youth Hub” portal in Islamabad on Thursday, saying it would connect young people to jobs, education and enhance skills development in the country, state-run media reported.
Estimates suggest approximately 64 percent of Pakistan’s population is under the age of 30, offering a significant opportunity to drive economic growth through a young workforce contributing to entrepreneurship, innovation and diversification.
A joint initiative of the Prime Minister’s Youth Programme (PMYP) and UNICEF, the PMYP’s website describes the Digital Youth Hub as a “comprehensive platform” to connect the younger generation with employment opportunities, educational scholarships, entrepreneurship programs and technical skills.
Speaking at the launching ceremony in Islamabad, Sharif stressed harnessing the true potential of the youth by imparting them with training in modern technologies such as information technology, artificial intelligence and vocational training.
“The Prime Minister said modern technology is the prerequisite in the current global world and the Digital Youth Hub is the beginning of a bright future of the youth of Pakistan,” state broadcaster Radio Pakistan said in a report.
He said the youth’s productive employment through this portal is this government’s top priority.
The Pakistani premier said he was committed to fighting for the rights of the youth, providing them educational opportunities and modern training in collaboration with the country’s provinces, Azad Kashmir and Gilgit-Baltistan regions.
“Shehbaz Sharif said the youth of Pakistan are a great challenge and opportunity, and there is a need to polish this challenge and opportunity through the latest technology,” Radio Pakistan said.
“He said productive employment of youth is the main target of the government through this portal.”
Despite Pakistan’s massive young population, the youth bulge also poses challenges, including high unemployment rates, limited access to quality education and vocational training and the risk of social unrest due to underutilized potential.
More than 800,000 Pakistanis left the country of 220 million to take up jobs in 2022, according to regulatory and monitoring body the Bureau of Emigration and Overseas Employment, up from a pre-pandemic total of 625,876 in 2019, and 382,439 the year before that.
Pakistan says keen to buy more oil from Russia, build new steel mill
- Pakistan’s finance minister meets Russian Deputy PM Alexei Overchuk on sidelines of BFA conference in China
- Pakistan and Russia, once Cold War rivals, have strengthened ties in recent years through increased trade
KARACHI: Finance Minister Muhammad Aurangzeb on Thursday expressed Islamabad’s interest in importing more crude oil from Russia to fulfill its energy requirements and seeking Moscow’s collaboration to build a new steel mill in Pakistan, the finance ministry said.
Aurangzeb met Russia’s Deputy Prime Minister Alexei Overchuk on the sidelines of the Boao Forum for Asia (BFA) Conference 2025, currently underway in China, to discuss bilateral ties, trade and investment between the two countries.
“The bilateral talks focused on strengthening energy cooperation, with Pakistan expressing interest in expanding the procurement of crude oil and investments in oil and gas exploration,” the finance ministry said.
Pakistan and Russia, once Cold War rivals, have strengthened ties in recent years through increased dialogue and trade. In 2023, Islamabad began purchasing discounted Russian crude oil banned from European markets due to Russia’s war in Ukraine and also received its first shipment of liquefied petroleum gas from Moscow.
In December last year, Russia and Pakistan held intergovernmental meetings in Moscow and discussed cooperation on oil and gas offshore exploration and refining, according to a Reuters news agency report.
Cash-strapped Pakistan has long planned to import crude oil from Moscow at discounted rates. Its first shipment of Russian crude oil in June 2023 consisted of 45,000 tons of oil. Russia welcomed Pakistan’s decision to buy oil from it as it increased the search for new buyers in the wake of European sanctions.
Islamabad is trying to secure discounted oil from Russia in hopes it will cut down its sizable import bill, which comprises expensive energy imports.
Pakistan is also trying to strengthen its debt-ridden economy with the help of the International Monetary Fund’s (IMF) financial bailout packages. The lender wants Islamabad to increase its depleting foreign exchange reserves to a level that could finance three months of imports.
Pakistan currently holds $10.6 billion in foreign exchange reserves that cover about two months of imports.
Separately, the finance minister also discussed collaborating with Russia on building a new steel mill in Pakistan.
“Pakistan’s keen interest in establishing a new steel mill with Russian collaboration was also highlighted,” the finance ministry said. “The minister stressed the importance of feasibility studies and cost assessments to move the project forward.”
A team of technical experts from Russia arrived in Pakistan in January to assess Pakistan Steel Mills (PSM), one of several firms Islamabad wants to sell to revive loss-making entities, as it strives to deliver reforms under a $7 billion International Monetary Fund bailout.
Russian Ambassador to Pakistan Albert P. Khorev this year announced cooperation with Pakistan in the energy and industrial sectors, including the modernization of a state-owned steel mill.
Aurangzeb reaffirmed Pakistan’s commitment to strengthening its economic and trade relations with Russia, saying he was excited about expanding bilateral cooperation in key areas of mutual interest, the ministry said.
