ISLAMABAD (Eshfak Mughal): The repatriation of foreign investors to their native countries from Pakistan was narrowed by 75 percent to $217 million mainly due to restriction of external payments during the first half of the current fiscal year.
The State Bank of Pakistan has issued a report on repatriation of profit or dividend on foreign investment of the first half (July-Dec) of the current fiscal year.
According to the report, the foreign investors have repatriated their profit and dividend worth $217 million during the first half of the current fiscal year as compared to $892 million during the same period of the last fiscal year.
The foreign investors have repatriated $182 million profit from Foreign Direct Investment and only $35 million from portfolio investment during the period, the report says.
The foreign companies working in 14 sectors and sub sectors in Pakistan did not repatriated profits of investment single penny to their countries during the first half of the current fiscal year.
According to the report, the foreign companies working in the sectors including Tourism, Industrial, Basic Metals, Petro Chemicals, Cosmetics, Construction, Motorcycling, Information Technology ,Postal & Courier Services ,Social Services, Rubber & Rubber Products, Paper & Pulp, Food Packaging did not repatriated single penny as profit or dividend on investment in Pakistan to their countries.
The data shows that the foreign companies working in Oil and Gas explorations have repatriated $86 million which is the highest amount of any sector during the first half of the current fiscal year. The companies working in mining & quarrying have repatriated profit worth $31 million, Power $32 million, Financial Business $17 million and Chemicals $15 million during the first half of the current fiscal year.
Last month, the International Air Transports Association (IATA) has claimed that Pakistan is among the countries which have blocked the payments of different airlines.
According to the data of IATA, Pakistan was on second which has blocked $225 million during the period.
“The IATA warned that the amount of airline funds for repatriation being blocked by the government has risen by more than 25 percent in the last six months.
The Association has called on government to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with the international agreements and treaty obligations.
The foreign reserves of the State Bank are depleting day by day which are not enough for the country’s import bill of just three weeks. The forex reserves of the State Bank has been squeezed from around $10 billion to $5.5 billion during the first half of the current fiscal year. They have been down to $3.5 billion on last week.
Commenting on the data, a former senior official in the Finance Ministry told the scribe that Pakistan is facing serious liquidity crunch for external payments. There could be two main reasons of depreciation in repatriation of profit on foreign investment during the last six months, he said.
He further said that the restrictions enforced by the State Bank of Pakistan on payments on imports and other outflows could be main factor in drastic decrease in the outflows. Stabilization program backed by the International Monetary Fund (IMF), devastation of the recent flash flood and monsoon rains have affected earning of the foreign companies in Pakistan.