ISLAMABAD, Sept 18: Pakistan’s potential to attract foreign direct investment (FDI) has improved marginally from 141 points in 1990 to 159 points in 2000, but its relative performance to secure FDI has reduced significantly from six points to two points.

This was the gist of “World Investment Report 2002” of the United Nations Conference on Trade and Development (UNCTAD), released by secretary, Board of Investment (BoI), Shuja Shah, here on Tuesday.

The report revealed that FDI to Pakistan reduced from $530 million in 1999 to $305 million in 2000 and improved to $385 million in 2001. As percentage of gross capital formation, the $530 million FDI was 6.7 per cent, which has reduced to 3.9 per cent in 2000.

Pakistan’s FDI total stock since 1980 till now amounted to $6.896 billion in 2000, but reduced to $6.698 billion in 2001. In the world ranking of 140 countries, Pakistan got 114th position in terms of investment potential and performance. Belgium and Luxembourg got first position in ranking followed by Hong Kong and Angola.

To a question, Mr Shuja said that improvement in investment potential in terms of attractiveness was because of political stability and economic outlook, but did not elaborate the reasons as to why this potential could not be materialized.

However, he said that new initiative like information technology parks, industrial clusters and export processing zones had been taken to tap this potential.

The report said that FDI flows to the developing economies of Asia and Pacific declined by 24 per cent last year to $102 billion, down from $134 billion in 2000.

In global inflows, the share of Asia and Pacific developing economies rose from 9 per cent in 2000 to nearly 14 per cent in 2001. China regained its position as the largest recipient in both the region and the developing world. India, Kazakhstan, Singapore and Turkey were leading recipients in their respective subregions.

Flows to China reached $47 billion in 2001, a 15 per cent rise over 2000. The momentum continued in the first half of this year with inflows rising by 19 per cent over the same period of 2001.

In China’s economy, foreign affiliates accounted for 23 per cent of the total industrial value added, 18 per cent of tax revenues and 48 per cent of total exports.

Inflows into South Asia reached $4 billion, a 32 per cent hike over the previous year. Of this, $3.4 billion went to India, up by 47 per cent. Against this, Pakistan attracted $385 million as the report said that inflows into other economies in the region stagnated or declined apparently due to perceived instability in the investment environment, particularly after 11 September.

The report suggest that transnational corporations (TNCs) played a pervasive role in the exports of developing countries. The list of world’s top exporting countries is dominated by developed and economies in transition accounted for principal gains in world export market shares.