KARACHI: Foreign direct investment (FDI) rose 15 per cent to $957 million in the first nine months (July-March) of this fiscal year from $832m a year ago, the State of Pakistan (SBP) said on Monday.

More than half of these inflows, ie $516m, were from China, which has been investing heavily under the China-Pakistan Economic Corridor (CPEC).

In contrast, the overall foreign private investment fell by 33pc, due mainly to massive outflow of portfolio investments. During this period under review, the outflow of foreign portfolio investment (FPI) was $346m compared to a net inflow of $86m during the same period a year earlier.

According to the SBP, no inflow or outflow from Panama was noted either during this year or the preceding year. However, Panama is included in the list of State Bank for FDI and FPI. The Central American country has recently come under the spotlight in many parts of the world, including Pakistan, due to existence of thousands of offshore companies with trillions of dollars that could be legal or illegal.

Barring investment from China, inflows fall 31pc year-on-year

In July-March FY16, some major disinvestments were made by friendly countries like Saudi Arabia ($70.3m), the United States ($41.7m), Germany ($32m) and Egypt ($34m).

After China, inflows from only two countries reached in three figures, ie the United Arab Emirates ($126m) and Hong Kong ($120m).

Chinese investment, which has now gone up to more than half a billion dollars, was just $193m during the same period of last fiscal year.

However, despite rise in FDI from China this year, the overall flow of money was smaller compared to a year ago. The inflows during July-March 2014-15 were $969m while the outflows were $775.4m; the figures have fallen to $544m and $28m, respectively, this year.

The detail shows that by excluding $516m Chinese investment, Pakistan received just $441m from the entire world during the nine-month period, which was 31pc less than the inflow of $639m (excluding $193m of Chinese investment) a year earlier.

This suggests that the government could not attract investment to any part of the country despite positive developments, including decline in terrorist activities.

Published in Dawn, April 19th, 2016