INVESTMENT in Pakistan, specifically foreign investment, aptly reflects the phrase ‘so near yet so far’ — ceremonial signings of MoUs galore, yet there is not much to rejoice over when one looks at the real investment numbers. An implication of this is that Pakistan has one of the world’s lowest investment-to-GDP ratios, even within the South Asian region, with repercussions for the entire economy.
In hindsight, this predicament is a tad surprising given certain attributes like Pakistan being a market of 250 million (and increasing) people. Yet we find that even local investors prefer destinations like Dubai. How does one unravel this puzzle?
Let’s turn to John Maynard Keynes — perhaps the most well-known figure in 20th-century economics. In chapter 22 of his magnum opus The General Theory of Employment, Interest and Money (1936), he states: “But I suggest that the essential character of the trade cycle … is mainly due to the way in
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