Pakistan struggles to attract investment despite its abundant resources and strategic location. The Board of Investment (BOI) has repeatedly failed to draw foreign and domestic investors, and the Special Investment Facilitation Council (SIFC) has not delivered the promised ease of doing business. Consequently, foreign direct investment remains stuck at 13.8% of GDP, far below regional peers like India, Vietnam, and Bangladesh.
Security and Governance Undermine Investor Confidence
Terrorism continues to terrorize businesses, deterring investors from committing capital. Investors demand safety for their lives, assets, and operations, yet Pakistan faces persistent threats from domestic and foreign sources. Experts argue that restoring diplomatic channels, initiating cross-border trade, and conducting strict security operations could improve confidence.
Moreover, weak judicial systems and political instability further erode investor trust. Delays in courts, inconsistent enforcement of laws, and perceptions of favoritism discourage long-term commitments. Corruption and opaque decision-making compound these issues, making Pakistan less attractive than competing investment hubs.
Economic Burdens and Policy Gaps Stall Growth
High taxes, energy tariffs, and regulatory hurdles inflate production costs, forcing many industries to shut down. Meanwhile, foreign remittances, although helpful in stabilizing the economy, do not directly contribute to productive investment. Debt servicing consumes over half of the national budget, leaving little room for development or incentives to attract investors.
Despite IMF-backed reforms and policy stabilization, reports indicate that 125 foreign companies have exited Pakistan, highlighting the fragility of current economic measures. Without tangible incentives—affordable energy, security, one-window facilitation, and transparent governance—the country cannot realize its potential as an investment hub.
Pakistan must act decisively to build a secure, transparent, and investor-friendly environment. Only then can it harness its resources, attract meaningful investment, and stimulate sustainable economic growth.
