Rethinking Pakistan’s FDI obsession

Many economists love quoting the declining or rising figures of the Foreign Direct Investment (FDI) coming to Pakistan. Not only do our governments boast about increasing FDI, but the commentators also appreciate it as an important gain. The SBP regularly updates the figures. Their fascination with FDI appears, if not like a panacea, certainly as a major breakthrough in achieving a faster growth rate or economic development. The April 23, 2024, newspapers published a story based on the SBP data highlighting an increase in the FDI. One newspaper, Dawn, reports that ‘Foreign direct investment jumps 51pc.’ Another newspaper, The News, reports that ‘investment surges 52pc to 21-month high in March.’ But do mind the devil that resides in the details. The FDI jumping by 51.7% increased to $258 million in March as compared to $170 million in the month of March last year. Actually, so far as the net FDI inflows in the first nine months of the current fiscal year 2023-24 are concerned, they fell by 10% to $1.09 billion.