The State Bank of Pakistan has recorded a 59% drop in FDI into Pakistan between July and November 2011, compared to the same period in 2010. While most analysts are attributing the decline to the sluggish global economy, some point to large investments into Pakistan in the pipeline from South Korean and Chinese companies. For instance, South Korea-based Daewoo International, a subsidiary of Pohang Iron and Steel, announced in January 2012 that it is to establish a new headquarters in Pakistan's second largest city, Lahore.
According to data from fDiMarkets, 2011 saw similar levels of FDI into Pakistan from three countries: Bahrain, China and the UK. Historically though, between January 2003 and November 2011, the United Arab Emirates has been the most prolific investor into Pakistan, with a total of 42 projects recorded.
Pakistan recorded its highest annual total of FDI projects in 2005. It recorded the highest level of FDI capital investment in 2006, when it also saw the largest number of jobs created by FDI. The number of greenfield investments has been in decline since then, however. These figures correlate with the State Bank of Pakistan's observation of a decline in FDI flow.
One economist believes that the government can overcome this challenge of declining FDI by reviving the country's privatisation programme and marketing viable sectors for foreign investment.