The overall 91-pecent growth in Foreign Direct Investment in Pakistan got major support from an increase in Chinese investment, mainly in power projects under the frame of China-Pakistan Economic Corridor (CPEC).
In the first 11 months of FY20, China was the largest investor with net investment of $855.6 million.
"As we talk about the sectors investment, the communication sector, mostly the 3G/4G service providers, attracted the largest foreign investment of $73.5 million in May 2020, followed by oil and gas exploration firms $18.6 million and financial businesses $15.5 million," a renowned Chinese scholar Zhou Rong said on July 27. The flow of foreign investment in future depends on the unfolding COVID-19-related events like the second and third waves of infections, controlling the crisis and introducing the much-awaited vaccine, Zhou, Senior Fellow of Chongyang Institute for Financial Study of Renmin University said. The return of stability to the financial health of global firms is a must to attract new foreign investment in Pakistan and also Pakistan’s ability to absorb FDI. Now, to attract FDI more effectively, the Pakistani government is all set to comply with the World Trade Organisation (WTO) provisions to implement Pakistan Single Window (PSW) to streamline cross-border movement of goods and regulatory bottlenecks, and the government has set a deadline of 2022 to put in place the whole system which will be implemented at a cost of $67 million. This will not only improve the ease of doing business, but also enhance controls through integrated risk management. According to media reports, the first phase of the PSW will be ready by the end of the current year, which will cover 80 per cent volume of various licenses, permits, certificates and other documents currently issued to regulate trade. The PSW programme includes phased establishment of an ICT-based platform involving simplification, harmonisation and automation of regulatory process related to cross-border trade. It also includes implementation of a port community system to facilitate related logistics.
And it was estimated, in ease of doing business report, the economic operators incurred over $500 million costs in Pakistan than their counterparts in South Asia to comply with the government’s regulations on imports, exports and transit trade in 2020. And the time to clear cargo lasts for days as compared to hours in neighboring countries.
If PSW is attentively implemented, then, all of the stakeholders will benefit from PSW. Meanwhile, the Federal Board of Revenue of Pakistan is also completing the process of converting the eight-digit Pakistan Customs Tariff to 12 digits so that the governments of all provinces may be strong in effective regulatory controls at borders and ports in line with international standards.
