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Consistent strategies can help move up FDI

Consistent strategies can help move up FDI

Interview with Mr Ahmed Chinoy (H.I,S.I) — a renowned businessman

[box type=”shadow” align=”” class=”” width=””]Profile:

Ahmed Chinoy is a businessman by profession and social activist by nature. Being in his profession for over 25 years with a vast experience and knowledge, he is associated with the textile industry since the beginning of his career. He is also the current past Chairman of Pakistan Cloth Merchants Association, an organization looking after the trade regulations with regards to textiles in the country. His business has diversified into more categories that are Construction Development, Project Management and Controlled Poultry Farms. He has served as the CPLC Chief for over 6 years and is associated with multiple NGOs working for the betterment of the country in different fields such as health, law and order situation, education and other departments. This work has led him to be the recipient of two highly prestigious National Awards: Sitara-e-Imtiaz and Hilal-e-Imtiaz. He is currently serving as the Director of Pakistan Stock Exchange.[/box]

PAGE: Foreign Direct Investment (FDI) received by Pakistan was $2.406 billion in FY17, $2.780 billion in FY18, $1.362 billion in FY19, $2.561 billion in FY20 and $1.847 billion in FY21. What is your perspective about it?

Ahmed Chinoy: Although we see our economy in the booming phase, a sharp decline in FDI is not a good sign to proceed with. But looking at the cycle of previous 4 years, it is seen that FDI tends to increase the following year when it shows a decline. So if correct measures are taken and public interest policies are implemented, we can also see a sharp increment in the FDI for FY 2022.

PAGE: Pakistan attracted FDI inflows of $5.6 billion and $5.4billion in 2007 and 2008 respectively mainly in telecom, power generation and financial services. What has gone wrong regarding the dip in the FDI?

Ahmed Chinoy: There is no doubt that IT and telecom services empowered good FDI in 2007-08, but in the past 12 to 13 years, we have seen political instability, act of terrorism and slow marketing of Pakistani policies which has hurt our image worldwide and is a huge reason for dip in our FDI.

PAGE: Foreign direct investment in South Asia was $71 billion in 2020 according to the World Investment Report 2021 of the United Nations Conference on Trade and Development. Why couldn’t Pakistan capitalize on it?

Ahmed Chinoy: As discussed above, our inconsistent policies have been a huge barrier for bringing in FDI. Another big reason which hurt the FDI was low influx of CPEC funding in Pakistan. For bringing in foreign investment, we need to have out of the box solutions but unfortunately, we have been unable to come up with any solution. Our telecom, IT and financial services sector have a huge market potential that we can capitalize on. All we need is the right track and right policy to follow. The government has taken a step in this matter with the advent of a new CPEC advisor. I am hopeful that this advisor will bring in a new perspective with effective policies that will turn the tables for Pakistan and good days will be seen in FY 2022 with regards to FDI.

PAGE: The FDI from the UAE, the second largest trade partner of Pakistan, increased last year to $86.6m. How would you comment on it?

Ahmed Chinoy: I think it is an asset that Pakistan has good ties with the UAE and many expatriates live and work over there. The main reason for increased FDI from UAE is the Roshan Digital account which has enabled many people to send in money to Pakistan easily. I believe this has opened pathways for people to invest in Pakistan and the Pakistani community should start new projects and expect a good revenue flow through FDI.

PAGE: Pakistan received only $90 million as FDI during July this year against $128.7 million in the same month of the previous fiscal which is the decline of 38.7%. Some people presume that the foreign investment would further fall in the coming months due to instability in Afghanistan. What is your take on it?

Ahmed Chinoy: I guess the decline in July’s FDI was due to the unstable condition of Afghanistan. But I give full credit to our PM, his team and the agencies that have worked day and night to make the situation controllable for Pakistan. Afghanistan’s new government is now working with a good perspective, and I foresee a good investment coming into Pakistan from the Afghan region. Business ties will be accessible, and Pakistan should capitalize on this opportunity and stand hand in hand with Afghanistan. Also the removal of India from the Afghan land will give Pakistan a upper hand to hold this opportunity and avail it to the fullest. The controlled scenario and investments from outside will help Pakistan increase its FDI for FY 2022 and I believe good policies from this government will ensure this as well.

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