Pakistan resets rules faster than investment cycles can adjust, eroding confidence
Amounts to $1.45b in 11MFY16 compared to net FDI inflow of $1.08b. PHOTO: REUTERS
Pakistan's debate over foreign direct investment (FDI), reignited by multinational exits and sporadic inflows, has revived an old question: why does one of the world's largest markets still struggle to inspire investor trust? The truth is; Pakistan's problem is not potential; it is predictability.
Pakistan is the world's fifth-largest nation, home to over 240 million people – a vast consumer base, a growing urban middle class, and a strategic location connecting South, Central, and West Asia. By geography and demographics alone, it should be a magnet for investment.
But potential does not attract capital, predictability does. Where rules change midstream, taxation becomes arbitrary, and decisions rest on discretion rather than process, even the biggest markets lose their pull.
How global investors think
Investment capital moves on logic, not sentiment. Multinationals plan in decades, not quarters.
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