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Faced with economic stagnation the Imran Khan-led government in Pakistan which has unsuccessfully tried to increase Foreign Direct Investments (FDI) has been let down by Saudi Arabia too, on whom Islamabad pinned its hopes.
A proposed investment agreement worth USD 20 billion with Saudi Arabia signed during the visit of Saudi Crown Prince Mohammed bid Salman in Islamabad has failed to materialize. Even Islamabad's much-hyped announcement of the construction of USD 10 billion Saudi Aramco oil refinery, part of the long-term investment, is yet to take off, according to Islam Khabar. Concerned with the declining FDI, Imran Khan had in October 2021, urged Saudi companies and entrepreneurs to invest in Pakistan while addressing the Saudi-Pakistan Investment Forum. Saudi companies wanted to explore investment opportunities in Pakistan in the field of energy, manufacturing, logistics, and transportation, among others However, they were deterred by inadequate infrastructures such as water, gas/power, and connectivity, and inefficient institutional set-up leading to corruption in Pakistan reported Islam Khabar. They were also concerned with delays in departmental approvals & clearances besides the non-availability of local bank financing. Furthermore, the Saudi companies showed concern about the lack of consistency & transparency in Pak investment policy. Additionally, investors were also discouraged by frequent political interventions and unrest due to public protests. Saudi entrepreneurs were reportedly of the view that Pak companies lack in implementation of quality compliance protocols in manufacturing Another concern was the lack of adequate capacity to meet export obligations as evidenced by their failure to meet follow-up supply requirements timely and with the requisite quality. This is attributed to the lack of skilled manpower in Pakistan's domestic labor market. Moreover, Pakistan companies are also seen as conservative and traditional in marketing their products with a limited budget and reluctant to adopt new-age marketing techniques, reported Islam Khabar. Pakistan is trying to push the FDI inflow through a basket of incentives however, despite these, in July-October quarter FY 2021-22, Pakistan FDI recorded a decline of 12 per cent to USD 662.5 million as compared to USD 750 million during the same period of the previous year. (ANI)
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