Inviting FDI: Is Pakistan an Attractive Destination?

PIDE Knowledge Brief No. 34:2021
Publication Year : 2021

Is Pakistan an attractive destination for foreign investment in the region? To put it bluntly, the answer is,
No. The reason why is simple: Pakistan has had volatile and episodic growth since the 1950s, and we: have low
rates of local investment, lag in innovation and suffer from low productivity. We need strong efforts to come
out of this vicious circle of low investment, low innovation and low productivity.
What can account for this circle of low investment leading to low innovation and low productivity?
PIDE’s Growth Reform Agenda (PIDE, 2021) has pointed out that the volatile growth (Figure 1) is reflective of
policy inconsistency and lack of cohesiveness.

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