Pakistan’s economy is in dire straits as confidence of investors is getting shaky. The exit of several multinational companies from Pakistan is a case in point, driving home a serious concern over future prospects of a consumer-driven economy. This phase of economic drain has incidentally come on the heels of euphoria where macroeconomic indicators are showing progress, and the country’s economic management is lauded by international donors and credit agencies.
The fact that the giants like Careem, P&G, Shell, Telenor, Merck, Johnson & Johnson, Pfizer and Lotte Chemicals have signed off shows the exit spans several sectors of the economy. It is not that these international conglomerates were not making profit, but it is the ingrained hurdles in the body-politic of our domestic mosaic that forced their exit. That necessitates some deep introspection, and that too on the premise of merit and stringent retribution against actors that had pushed the economy to the brink.
The general complaints pertain to undesired regulations, an over-extended blanket of undocumented economy, withering exchange rate and soaring energy prices. These elements have made businesses enter compartmentalisation, wherein they faced problems in repatriating profits, and soon found their cost of production to be untenable with reasonable accumulation of dividends, apart from irritations on taxation, duties and surcharges.
Pakistan’s desire for attracting FDI seems to have hit snags, and this is where some astute homework is needed. The FDI stood at a mere $2.46 billion in FY25, far lower than the regional economies that attracted fortunes in leaps and bounds. It is a given that the prevalent ad-hocism in state affairs along with political instability have worked to sour the confidence of big-ticket business. Adding to the misery is the tendency of extortion prevalent in metropolitan cities and the dilapidated law and order situation. This moment of economic exigency calls for an ordained policy approach – one that is business-friendly and not based on parochialism.
