Chowrangi

While strictly criticizing their predecessors, current coalition government of Pakistan is actually following the foot steps of Shaukat Aziz and company. In last few days, there are news items of new loans, from international institutions as well as friendly countries, streaming in Pakistan for one reason or the other. However, no plans are made public on how to pay back what is already being taken by previous government.

Interestingly, with issues like crisis of power, shortage of commodities, rising inflation, insecurity and political uncertainty, World Bank still considers Pakistan as one of the best investment destinations of the world.

Before we start getting high and jumping to seventh heaven, lets analyze why Pakistan is such an attraction for foreign investors. The News reports that foreign investors find Pakistan an attractive destination because they are allowed to invest in any sector and bid for any privatized enterprise. Besides, there is no limit to the profit they can make and they can repatriate 100 per cent of the capital anytime and remit their total profits to their countries. This definitely places us in league with free zone countries like UAE, Hong Kong, Mauritius etc.

However, instead of turning the influx of investment towards building sustainable infrastructure and uplifting industries, the government has provided a quick Return-on-Investment scheme to foreign investors. While Pakistan receive large foreign direct investment (FDI), at the same time outflow of profits/dividends in foreign exchange is also raising.

As during the FY2006-07, such outflows on account of remittance of profits and dividends to foreign investors’ countries of origin amounted to $804.2 million against $504.4 million in FY2005-06.

So, this means that the investors are coming in for a quick suck, investing in most profitable sectors and taking their returns out, as soon as possible.

Here is what the foreign investors have taken out from various sectors in form of dividends and profit remittances during last Fiscal Year:

• Power sector (especially thermal): $126.5 million
• Communication Sector: $88.2 million
• Financial Business Sector: $52.1 million
• Oil and Gas Exploration Sector: $60.5 million
• Petroleum Refining Sector: $48.2 million
• Chemicals Sector: $29.4 million
• Tobacco and Cigarettes Sector: $27.3 million
• Food Sector: $21.69 million
• Pharmaceuticals and OTC Products Sector: $19 million
• Transport Sector: $15 million
• Trade Sector: $14.4 million
• Transport Equipment Sector (automobiles): $13.8 million
• Food Packaging Sector: $5.8 million
• Cement Sector: $5.6 million
• Storage Facilities Sector: $5.1 million
• Personnel Services Sector: $2.5 million
• Tourism Sector: $2.4 million
• Textiles Sector: $1.4 million

With private entities like MCB selling 15-20% shareholding to Malaysian MayBank and government considering 10% privatization of Steel Mill, it is clear that national assets and resources of Pakistan are for sale, maybe not to the highest bidder but most favorable one.

Other posts by Kashif Aziz

• Two Supreme Courts to resolve Judiciary Restoration debacle? - May 10th, 2008
• Shazia Marri for forgetting May 12 - May 10th, 2008
• Cyclone Nargis claimed 22,000 in Myanmar - May 7th, 2008
• In Pakistan Laws are made for the weak - April 29th, 2008
• KESC bent on Killing Karachities - April 28th, 2008
• Are the Ministers using 1600cc cars? - April 25th, 2008
• Nawaz Sharif got his Mercedes back - April 25th, 2008
• Website of Pakistan Embassy in Afghanistan - April 22nd, 2008
• Where is Ambassador Tariq Azizuddin? - April 22nd, 2008
• Makhdoom Altaf Abbasi Advocate: Can somebody tell what was his fault? - April 11th, 2008