Foreign Direct Investment Falls Sharply for Pakistan in July August 2009

Foreign Direct Investment (FDI) is a very important thing for any third world country. In the last one decade, Pakistan government has been trying very hard indeed to attract foreign investment and got some success. Well, in July-August 2009, FDI decreased 57% compared to the same two months of last year.

Bloomberg reported:

Investment in July-August period fell to $351.4 million from $824.7 million a year ago, according to data on the Web site of the Karachi-based State Bank of Pakistan. Overseas investors bought a net $60.8 million of Pakistani stocks in the two months, compared with sales of $178.3 million a year earlier, according to the data.

This is surely bad news for Pakistani economy. Well, I think that two factors are to be mainly blamed. First of all, global economic recession has resulted in less flow of investment from rich western countries. Secondly, the security condition of the country often brings it to the headlines of international media. So, naturally foreign directors are worried about it.