Foreign investors sound the alarm in Pakistan: Dividends held hostage, businesses at risk!
Foreign investors are growing increasingly frustrated with the situation in Pakistan, with over 200 multinationals signing a letter to Prime Minister Shehbaz Sharif to express their concerns. The investors have been unable to send dividends to overseas shareholders for the past 10 months, which is causing reputational damage to the country.
In addition to this, the scarcity of dollars has led to a shortage of critical spare parts and key raw materials for multinational corporations, resulting in many of them being forced to close or partially close their operations and lay off workers.
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The investors are calling on the government to support the export of non-traditional sectors like IT and services to boost the country’s FX income potential. The OICCI has recently issued its “Digital Transformation Recommendations 2022,” which highlights the potential for the IT sector to contribute up to $60 billion towards the economy by 2030.
The pharmaceutical sector is also struggling to survive due to high inflation, with many international companies leaving the market. The remaining companies are finding it challenging to stay in business, as all prices are fixed by the government.
With the repatriation of profits falling significantly in the first seven months of the current fiscal year, foreign investors are calling on the government to take action to address these issues. The situation is causing serious financial losses to the industry and is making the return on investment for foreign investors even less attractive.
As Pakistan’s foreign exchange reserves are barely enough to cover one month’s import bill, the government must take swift action to support foreign investors and boost the country’s economy. The eyes of the business world are on Pakistan, and the government’s response to these concerns could have far-reaching consequences for the country’s future.