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Mixed legacy of multinationals (MNCs) in Pakistan

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Mixed legacy of multinationals in Pakistan
  • Billions invested, millions employed — yet regulatory and security hurdles threaten long-term multinational confidence

Multinational companies (MNCs) have played a pivotal role in shaping Pakistan’s economy over the past several decades. These corporations, operating across multiple countries with significant capital, technology, and expertise, bring foreign direct investment (FDI), create jobs, and drive innovation in host countries.

In Pakistan, MNCs have been instrumental in sectors like fast-moving consumer goods (FMCG), telecommunications, energy, pharmaceuticals, and technology, contributing to economic growth, infrastructure development, and skill transfer. However, their presence has been a mixed bag, with challenges such as regulatory hurdles, security concerns, and economic instability impacting their operations. This article examines the role and impact of MNCs in Pakistan’s economy, focusing on their investments over the last 25 years, current investment trends, and the reasons behind the departure of some MNCs, while critically analyzing their broader economic and social implications.

MNCs serve as engines of economic development in Pakistan by injecting capital, introducing advanced technologies, and fostering global trade linkages. Their contributions can be categorized as follows:

  • Foreign Direct Investment (FDI): MNCs are a major source of FDI, which bolsters Pakistan’s foreign exchange reserves and funds infrastructure projects. FDI from MNCs supports industrial growth, reduces reliance on external borrowing, and enhances economic stability.
  • Job Creation: MNCs employ thousands of Pakistanis, offering competitive wages and better working conditions compared to many local firms. For instance, companies like Nestlé (3,500 employees) and PepsiCo (5,000 employees) are significant employers in FMCG, while Unilever employs around 2,000 people.
  • Technology and Skill Transfer: MNCs introduce cutting-edge technologies and global best practices, elevating local industry standards. For example, Samsung has driven innovation in consumer electronics, while Unilever has developed robust supply chain networks since 1948.
  • Infrastructure Development: MNC investments in manufacturing, telecommunications, and energy have improved Pakistan’s infrastructure, creating a more conducive business environment. The telecom sector alone attracted $9 billion in FDI from 2003–2007, revolutionizing connectivity.
  • Tax Contributions: MNCs contribute significantly to Pakistan’s tax revenue, with the government relying heavily on them for both direct and indirect taxes. American firms registered with the American Business Council (ABC) generated $3 billion in revenues, paying substantial taxes annually.
  • Economic Diversification: By operating in diverse sectors—FMCG, energy, pharmaceuticals, and technology—MNCs reduce Pakistan’s dependence on agriculture and textiles, fostering a more balanced economy.

However, MNCs also face criticism for potentially marginalizing local businesses, prioritizing profits over social responsibility, and exerting undue influence on policy. Their operations must be culturally sensitive to avoid eroding local values or practices.

Impact of MNCs over the last 25 years (2000–2025)

Over the past 25 years, MNCs have left a significant mark on Pakistan’s economy, with their impact evolving through periods of liberalisation, security challenges, and economic reforms.

– 2000–2010: Liberalisation and telecom boom:

  • The early 2000s marked a period of economic liberalization under General Pervez Musharraf’s regime, attracting substantial FDI. The telecom sector was a standout, with MNCs like Nokia, Sony Ericsson, and Motorola investing over $9 billion from 2003–2007, leading to 91 million mobile subscribers by 2009.
  • FMCG giants like Unilever, Nestlé, and Coca-Cola expanded their footprint, leveraging Pakistan’s growing middle class (over 50% of the population by 2014). Unilever’s supply chain investments since 1948 strengthened distribution networks, while Coca-Cola, operating since 1960, created jobs and supported infrastructure.
  • Energy and power sectors saw investments from MNCs like Shell and Engro Corporation, though regulatory opacity hindered pharmaceutical MNCs. FDI peaked at $5.4 billion in FY2008, with significant contributions from food (e.g., Engro Foods’ sale to a Dutch firm) and construction.
  • Impact: This period saw robust GDP growth (averaging 5–6% annually), reduced poverty (29.1% by 1986–87, though data for 2000s is less precise), and improved connectivity, but security concerns post-2009 slowed momentum.

– 2010–2020: Security challenges and CPEC:

  • The 2009 attack on the Sri Lankan cricket team and subsequent security issues deterred MNCs, with FDI dropping to $2.7 billion by FY2017. Several oil and gas MNCs, including Petronas (Malaysia), BHP (Australia), Tullow (UK), OMV (Austria), and ENI (Italy), exited due to unpaid government dues and security risks.
  • The China-Pakistan Economic Corridor (CPEC), launched in 2015, brought significant Chinese FDI (over $21 billion in energy, agriculture, and oil/gas), but non-Chinese FDI remained limited. Power companies benefited, but renewable energy MNCs faced inconsistent policies.
  • Consumer goods MNCs like PepsiCo, Procter & Gamble, and Coca-Cola thrived, capitalizing on Pakistan’s large population (190 million by 2014). American firms invested $1.5 billion, generating $3 billion in revenues, per the ABC.
  • Impact: MNCs sustained job creation and tax contributions, but FDI was constrained by a weak regulatory environment, corruption, and infrastructure deficits. GDP growth averaged 4–5%, with telecom and FMCG as bright spots.

– 2020–2025: Recovery and challenges:

  • Despite the Covid-19 pandemic, Pakistan’s economy grew by 5.6% in FY2021, supported by MNC resilience. The 2022 floods and global commodity price hikes strained the economy, but MNCs in FMCG, healthcare, and technology remained active.
  • The World Bank’s Country Partnership Framework (2025–2030) emphasises sustained MNC investments in health, education, and energy for long-term growth. For example, Nestlé’s health initiatives and Unilever’s sustainable practices continue to align with national priorities.
  • The pharmaceutical sector benefits from the planned Pharmaceutical Economic Zone, though the operating environment remains harsh. ExxonMobil’s return in 2018, acquiring 25% shares in offshore drilling, signals renewed interest in energy.
  • Impact: MNCs have driven job creation (e.g., GSK employs 1,500), skill development, and FDI, but internet disruptions in 2024 led to losses of $300 million and prompted some MNCs to relocate back offices. GDP growth is projected at 3–4% for FY2025, with MNCs critical to recovery.

Over 25 years, MNCs have invested billions, created millions of jobs, and transformed sectors like telecom and FMCG. However, their impact has been tempered by structural challenges, with FDI inflows lagging behind regional competitors like India and Bangladesh.

Current Investments by MNCs (2025)

As of April 2025, MNCs continue to operate in Pakistan across diverse sectors, though the investment climate remains challenging. Key trends and examples include:

– FMCG and Consumer Goods:

  • Unilever: Operating since 1948, employs 2,000 and invests in sustainable agriculture and supply chains. Despite economic downturns affecting sales, it remains a market leader.
  • Nestlé Pakistan: Employs 3,500, with a 50% market share in food and beverages. Investments focus on dairy, nutrition, and clean water programs, contributing to GDP growth.
  • PepsiCo and Coca-Cola: PepsiCo employs over 5,000, while Coca-Cola, active since 1960, supports infrastructure and social initiatives. Both face high operating costs but remain committed.

– Technology and Telecom:

  • Samsung: A major investor since the 1990s, Samsung drives innovation in consumer electronics, with training programs for local employees.
  • Microsoft Pakistan: Supports IT growth through software and cloud solutions, fostering skill development.
  • Telecom MNCs like Telenor and Jazz (local subsidiaries) continue to invest in 4G/5G infrastructure, building on the $9 billion FDI from 2003–2007.

– Pharmaceuticals and Healthcare:

  • GSK: Employs 1,500 and invests in healthcare solutions, benefiting from deregulation of non-essential medicines.
  • Pfizer and Abbott Laboratories: Active in pharmaceuticals, these firms face regulatory opacity but contribute to health infrastructure.

– Energy and Mining:

  • ExxonMobil: Returned in 2018 with a 25% stake in offshore drilling, eyeing potential hydrocarbon reserves.
  • Reko Diq Project: The 2022 Foreign Investment Promotion and Protection Act (FIPPA) supports MNC investments in this copper-gold project, set to begin production in 2029–2030.

– Financial Services:

  • Standard Chartered: Offers modern banking practices and employs thousands, enhancing financial inclusion.
  • Over 80 U.S.-owned subsidiaries, registered with the ABC and American Business Forum (ABF), operate in financial services, contributing $1.5 billion in investments.

– Recent FDI Trends:

  • Qatar’s $3 billion commitment in 2019, with $500 million disbursed by June 2019, targets energy and infrastructure.
  • Chinese FDI via CPEC remains dominant, with $21 billion in MoUs since 2018, though non-Chinese FDI is limited to consumer goods and energy.
  • The Dubai Chamber of Commerce reported 3,968 Pakistani firms registering in Dubai in H1 2024, signaling some capital flight amid local challenges.

Current investments are bolstered by legal protections like the Foreign Private Investment Promotion and Protection Act (1976) and the Protection of Economic Reforms Act (1992), which safeguard MNCs from discriminatory taxation and expropriation. However, challenges like internet disruptions, profit repatriation delays, and a weak judiciary hinder growth.

  • Billions invested, millions employed — yet regulatory and security hurdles threaten long-term multinational confidence

Multinational companies (MNCs) have played a pivotal role in shaping Pakistan’s economy over the past several decades. These corporations, operating across multiple countries with significant capital, technology, and expertise, bring foreign direct investment (FDI), create jobs, and drive innovation in host countries.

In Pakistan, MNCs have been instrumental in sectors like fast-moving consumer goods (FMCG), telecommunications, energy, pharmaceuticals, and technology, contributing to economic growth, infrastructure development, and skill transfer. However, their presence has been a mixed bag, with challenges such as regulatory hurdles, security concerns, and economic instability impacting their operations. This article examines the role and impact of MNCs in Pakistan’s economy, focusing on their investments over the last 25 years, current investment trends, and the reasons behind the departure of some MNCs, while critically analyzing their broader economic and social implications.

MNCs serve as engines of economic development in Pakistan by injecting capital, introducing advanced technologies, and fostering global trade linkages. Their contributions can be categorized as follows:

  • Foreign Direct Investment (FDI): MNCs are a major source of FDI, which bolsters Pakistan’s foreign exchange reserves and funds infrastructure projects. FDI from MNCs supports industrial growth, reduces reliance on external borrowing, and enhances economic stability.
  • Job Creation: MNCs employ thousands of Pakistanis, offering competitive wages and better working conditions compared to many local firms. For instance, companies like Nestlé (3,500 employees) and PepsiCo (5,000 employees) are significant employers in FMCG, while Unilever employs around 2,000 people.
  • Technology and Skill Transfer: MNCs introduce cutting-edge technologies and global best practices, elevating local industry standards. For example, Samsung has driven innovation in consumer electronics, while Unilever has developed robust supply chain networks since 1948.
  • Infrastructure Development: MNC investments in manufacturing, telecommunications, and energy have improved Pakistan’s infrastructure, creating a more conducive business environment. The telecom sector alone attracted $9 billion in FDI from 2003–2007, revolutionizing connectivity.
  • Tax Contributions: MNCs contribute significantly to Pakistan’s tax revenue, with the government relying heavily on them for both direct and indirect taxes. American firms registered with the American Business Council (ABC) generated $3 billion in revenues, paying substantial taxes annually.
  • Economic Diversification: By operating in diverse sectors—FMCG, energy, pharmaceuticals, and technology—MNCs reduce Pakistan’s dependence on agriculture and textiles, fostering a more balanced economy.

However, MNCs also face criticism for potentially marginalizing local businesses, prioritizing profits over social responsibility, and exerting undue influence on policy. Their operations must be culturally sensitive to avoid eroding local values or practices.

Impact of MNCs over the last 25 years (2000–2025)

Over the past 25 years, MNCs have left a significant mark on Pakistan’s economy, with their impact evolving through periods of liberalisation, security challenges, and economic reforms.

– 2000–2010: Liberalisation and telecom boom:

  • The early 2000s marked a period of economic liberalization under General Pervez Musharraf’s regime, attracting substantial FDI. The telecom sector was a standout, with MNCs like Nokia, Sony Ericsson, and Motorola investing over $9 billion from 2003–2007, leading to 91 million mobile subscribers by 2009.
  • FMCG giants like Unilever, Nestlé, and Coca-Cola expanded their footprint, leveraging Pakistan’s growing middle class (over 50% of the population by 2014). Unilever’s supply chain investments since 1948 strengthened distribution networks, while Coca-Cola, operating since 1960, created jobs and supported infrastructure.
  • Energy and power sectors saw investments from MNCs like Shell and Engro Corporation, though regulatory opacity hindered pharmaceutical MNCs. FDI peaked at $5.4 billion in FY2008, with significant contributions from food (e.g., Engro Foods’ sale to a Dutch firm) and construction.
  • Impact: This period saw robust GDP growth (averaging 5–6% annually), reduced poverty (29.1% by 1986–87, though data for 2000s is less precise), and improved connectivity, but security concerns post-2009 slowed momentum.

– 2010–2020: Security challenges and CPEC:

  • The 2009 attack on the Sri Lankan cricket team and subsequent security issues deterred MNCs, with FDI dropping to $2.7 billion by FY2017. Several oil and gas MNCs, including Petronas (Malaysia), BHP (Australia), Tullow (UK), OMV (Austria), and ENI (Italy), exited due to unpaid government dues and security risks.
  • The China-Pakistan Economic Corridor (CPEC), launched in 2015, brought significant Chinese FDI (over $21 billion in energy, agriculture, and oil/gas), but non-Chinese FDI remained limited. Power companies benefited, but renewable energy MNCs faced inconsistent policies.
  • Consumer goods MNCs like PepsiCo, Procter & Gamble, and Coca-Cola thrived, capitalizing on Pakistan’s large population (190 million by 2014). American firms invested $1.5 billion, generating $3 billion in revenues, per the ABC.
  • Impact: MNCs sustained job creation and tax contributions, but FDI was constrained by a weak regulatory environment, corruption, and infrastructure deficits. GDP growth averaged 4–5%, with telecom and FMCG as bright spots.

– 2020–2025: Recovery and challenges:

  • Despite the Covid-19 pandemic, Pakistan’s economy grew by 5.6% in FY2021, supported by MNC resilience. The 2022 floods and global commodity price hikes strained the economy, but MNCs in FMCG, healthcare, and technology remained active.
  • The World Bank’s Country Partnership Framework (2025–2030) emphasises sustained MNC investments in health, education, and energy for long-term growth. For example, Nestlé’s health initiatives and Unilever’s sustainable practices continue to align with national priorities.
  • The pharmaceutical sector benefits from the planned Pharmaceutical Economic Zone, though the operating environment remains harsh. ExxonMobil’s return in 2018, acquiring 25% shares in offshore drilling, signals renewed interest in energy.
  • Impact: MNCs have driven job creation (e.g., GSK employs 1,500), skill development, and FDI, but internet disruptions in 2024 led to losses of $300 million and prompted some MNCs to relocate back offices. GDP growth is projected at 3–4% for FY2025, with MNCs critical to recovery.

Over 25 years, MNCs have invested billions, created millions of jobs, and transformed sectors like telecom and FMCG. However, their impact has been tempered by structural challenges, with FDI inflows lagging behind regional competitors like India and Bangladesh.

Current Investments by MNCs (2025)

As of April 2025, MNCs continue to operate in Pakistan across diverse sectors, though the investment climate remains challenging. Key trends and examples include:

– FMCG and Consumer Goods:

  • Unilever: Operating since 1948, employs 2,000 and invests in sustainable agriculture and supply chains. Despite economic downturns affecting sales, it remains a market leader.
  • Nestlé Pakistan: Employs 3,500, with a 50% market share in food and beverages. Investments focus on dairy, nutrition, and clean water programs, contributing to GDP growth.
  • PepsiCo and Coca-Cola: PepsiCo employs over 5,000, while Coca-Cola, active since 1960, supports infrastructure and social initiatives. Both face high operating costs but remain committed.

– Technology and Telecom:

  • Samsung: A major investor since the 1990s, Samsung drives innovation in consumer electronics, with training programs for local employees.
  • Microsoft Pakistan: Supports IT growth through software and cloud solutions, fostering skill development.
  • Telecom MNCs like Telenor and Jazz (local subsidiaries) continue to invest in 4G/5G infrastructure, building on the $9 billion FDI from 2003–2007.

– Pharmaceuticals and Healthcare:

  • GSK: Employs 1,500 and invests in healthcare solutions, benefiting from deregulation of non-essential medicines.
  • Pfizer and Abbott Laboratories: Active in pharmaceuticals, these firms face regulatory opacity but contribute to health infrastructure.

– Energy and Mining:

  • ExxonMobil: Returned in 2018 with a 25% stake in offshore drilling, eyeing potential hydrocarbon reserves.
  • Reko Diq Project: The 2022 Foreign Investment Promotion and Protection Act (FIPPA) supports MNC investments in this copper-gold project, set to begin production in 2029–2030.

– Financial Services:

  • Standard Chartered: Offers modern banking practices and employs thousands, enhancing financial inclusion.
  • Over 80 U.S.-owned subsidiaries, registered with the ABC and American Business Forum (ABF), operate in financial services, contributing $1.5 billion in investments.

– Recent FDI Trends:

  • Qatar’s $3 billion commitment in 2019, with $500 million disbursed by June 2019, targets energy and infrastructure.
  • Chinese FDI via CPEC remains dominant, with $21 billion in MoUs since 2018, though non-Chinese FDI is limited to consumer goods and energy.
  • The Dubai Chamber of Commerce reported 3,968 Pakistani firms registering in Dubai in H1 2024, signaling some capital flight amid local challenges.

Current investments are bolstered by legal protections like the Foreign Private Investment Promotion and Protection Act (1976) and the Protection of Economic Reforms Act (1992), which safeguard MNCs from discriminatory taxation and expropriation. However, challenges like internet disruptions, profit repatriation delays, and a weak judiciary hinder growth.

Last words

Multinational companies have been transformative yet contentious players in Pakistan’s economy over the last 25 years. From the telecom boom of the 2000s to current investments in FMCG, technology, and energy, MNCs have driven FDI, job creation, and infrastructure development, contributing billions to GDP and tax revenues. Companies like Unilever, Nestlé, PepsiCo, and Samsung remain pillars of economic growth, while ExxonMobil’s return and CPEC investments signal future potential.

However, the departure of MNCs like Petronas, BHP, and tech firms in 2024 underscores persistent challenges: security risks, regulatory complexity, judicial inefficiency, infrastructure gaps, and economic instability.

While MNCs have marginalised some local businesses and strained foreign reserves, their overall impact is positive when managed responsibly. To maximise MNC contributions, Pakistan must simplify regulations, strengthen infrastructure, and ensure a transparent, secure business environment. By addressing these challenges, Pakistan can leverage its population, resources, and strategic location to attract sustained MNC investment, fostering inclusive and sustainable economic growth.

The author, Nazir Ahmed Shaikh, is a freelance writer, columnist, blogger, and motivational speaker. He writes articles on diversified topics. He can be reached at nazir_shaikh86@hotmail.com

Multinational companies have been transformative yet contentious players in Pakistan’s economy over the last 25 years. From the telecom boom of the 2000s to current investments in FMCG, technology, and energy, MNCs have driven FDI, job creation, and infrastructure development, contributing billions to GDP and tax revenues. Companies like Unilever, Nestlé, PepsiCo, and Samsung remain pillars of economic growth, while ExxonMobil’s return and CPEC investments signal future potential.

However, the departure of MNCs like Petronas, BHP, and tech firms in 2024 underscores persistent challenges: security risks, regulatory complexity, judicial inefficiency, infrastructure gaps, and economic instability.

While MNCs have marginalised some local businesses and strained foreign reserves, their overall impact is positive when managed responsibly. To maximise MNC contributions, Pakistan must simplify regulations, strengthen infrastructure, and ensure a transparent, secure business environment. By addressing these challenges, Pakistan can leverage its population, resources, and strategic location to attract sustained MNC investment, fostering inclusive and sustainable economic growth.

The author, Nazir Ahmed Shaikh, is a freelance writer, columnist, blogger, and motivational speaker. He writes articles on diversified topics. He can be reached at nazir_shaikh86@hotmail.com