Economic woes driving global firms’ exodus

More multinational companies have divested their assets or temporarily halted their operations in Pakistan continuing a trend that began in calendar 2022. Over the past 30 months, numerous firms have chosen to relocate their activities outside of Pakistan or reduce operations due to significant political and economic challenges. Multinational corporations (MNCs) naturally experience fluctuations in their expansion and downsizing efforts, influenced by factors like access to capital, availability of workforce and strategic considerations. In Pakistan, a combination of policy decisions and an unfavourable regulatory environment has made it relatively easy for these companies to make a choice: either cease operations or pursue cost-cutting measures such as downsizing or divesting their assets. The outgoing calendar year 2023 began with announcements from corporations such as Lotte Chemicals which sold its whole 75pc ownership and Puma Holdings divested its 57pc stake in January. This was a period when MNCs were examining their worldwide footprints while taking into account a variety of issues. Pakistan was rated at the top due to severe political instability and contradictory economic policies.