The Economic Rank
By the Editor

WITH the current political milieu, remaining intact in Pakistan – as was being envisioned – the resultant instability seems to have started taking its toll on economic and development side.

Reports indicate that foreign investment, after a long gap, has declined by 16% during the first two months of the existing fiscal year.

The figures released by the State Bank of Pakistan show that foreign investment, including foreign direct investment [FDI] and portfolio investment, declined by 60.4 million dollars during the period as compared to the same period previous year.

Time and again – we have been emphasizing that Pakistan’s nascent monetary gains could ill-afford constant confusion and uncertainty about political landscape of the country.

Incentives for investors would not work if prospective entrepreneurs were not sure about future of their investment due to political upheavals.

Going by the index of history – we have seen in 90s that despite liberal fiscal incentives and facilitation – the annual foreign investment hovered around 400 or 500 million dollars.
Of-course, it was mainly because of frequent dismissal of the elected Governments and multiple ambiguities about the policies initiated by the regimes.

If the truth be told, the country achieved a breakthrough in economic development during the last eight years largely due to continuity of policies.

Though, at this moment of time – there is dire need for consolidation of the gains and to ensure sustainability of the high growth – yet, paradoxically – the the prevailing political tension has started affecting diverse economic indicators.

Prima facie, the main reasons behind drop in investment were falling portfolio inflows, as the foreign investors were reluctant to invest in the equity market due to political uncertainty and negative reports regarding the country’s stock market.

Likewise, taking advantage of the state of affairs market forces have started exploiting consumers and price-hike is touching new altitudes and heights creating teething-troubles – not only for the people but also for the high-ups.

Amid this scenario – hoarders and smugglers are having free hand in manipulating demand and supply to mint millions – with awful lust to turn richest – overnight.

They have succeeded in creating atta crisis in a country – which has been set marvellous records vis-à-vis wheat crop – since decades.

Keeping in view these circumstances, we feel optimistic that both the Government and the Opposition would not opt for extreme positions and would rather – allow smooth transition through genuinely free, fair and transparent elections.

We think that there should also be a consensus about continuity of economic policies – so as to ensure that investors don’t have to feel upset towards their investments, irrespective of the view, who rules the lovely country – Pakistan.●