Despite the government’s renewed push to attract foreign direct investment, economists warn that Pakistan’s fragile economy cannot stabilise without deep structural reforms. Experts say recent pledges from China, the UAE and Belarus are positive but not transformational, as they remain capital-intensive and lack innovation-led growth potential.
Industry leaders highlight that the exit of multinational giants such as Sanofi, P&G, and GlaxoSmithKline has deprived Pakistan of research and corporate governance standards. “We should not confuse movement with momentum,” said SM Ishtiaq, CEO of SM Engineering, referring to policy inconsistency and weak enforcement that continue to discourage long-term investors.
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According to the State Bank of Pakistan, FDI inflows dropped slightly to $1.84 billion in FY25, signalling low investor confidence. Experts stress that most inflows are state-driven, with little contribution to technology transfer or sustainable job creation.
Analysts insist Pakistan must move beyond reactive policymaking and create a predictable environment for private innovation-led investment. Without consistent reforms, foreign capital will remain cyclical, offering temporary inflows but no durable transformation.
