Foreign investors rue lack of government response over threat to business continuity in Pakistan

This general view shows the commercial district of Pakistan's port city of Karachi on February 3, 2023. (AFP/File)
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Updated 11 April 2023
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Foreign investors rue lack of government response over threat to business continuity in Pakistan

  • Government unable to clear $1.5 billion outbound remittances, Overseas Investors Chamber of Commerce and Industry says
  • Investors say high inflation and interest rates, weakening currency, uncertain environment affecting business confidence

KARACHI: Overseas investors said on Tuesday they were faced with a growing challenge and threat to the continuity of their businesses in the South Asian country as the government remains unable to devise a plan to clear an estimated $1.5 billion outbound remittances.   

Top officials of a representative body of multinational companies operating in Pakistan told journalists in Karachi the country's current economic situation was affecting the confidence of foreign investors.  

“Besides shrinking economy, the high inflation and interest rates, weakening currency, the uncertain environment and lack of ownership is affecting business confidence,” said Amir Paracha, president of the Overseas Investors Chamber of Commerce and Industry (OICCI). 

The OICCI chief said the major concern prevails about the remittance of dividends pending for the last one year besides remittances for services, including directors’ fees that need to be repatriated.

Pakistani Finance Minister Ishaq Dar did not respond to Arab News' request for a comment on the matter.




Infographics by OICCI

Paracha estimated that around $1.5 billion were stuck up in Pakistan that multinational companies wanted to be repatriated to their parent companies, but were unable to have the payments processed due to the current economic meltdown in the South Asian country.   

“All multinational companies (MNCs) are faced with serious foreign exchange remittance issue,” Paracha said. “We fully understand the economic constraints but at least the government should sit with us to chalk out a plan to deal with the situation for the satisfaction of companies’ headquarters.” 

The South Asian nation has been facing a severe dollar liquidity crunch that has either slowed or blocked the process of dollar outflow to avoid complete dry up of its meagre $4.2 billion foreign exchange reserves.   

The current reserve position continues to exert pressure on the national currency that has seen a massive decline in its value against US dollar. The greenback further rose to Rs288.43 on Tuesday.   

Abdul Aleem, the OICCI general secretary, said the primary challenge being faced by most companies was the “threat to business continuity” under the current situation.    

“An active forum for the government and the private sector is vital to interact and collectively drive actionable reforms,” he said. 

Multinational companies face difficulties in repatriation of dividends, royalty, technical fee and service payments to their parent companies and the government’s indifferent attitude is further compounding the situation, Aleem informed. 

“We have approached the prime minister, the finance ministry and the board of investment but no one has responded to date,” he lamented. 

The OICCI officials said they had offered four options for the situation, including repatriation of 10 percent of pending dividends within the next two months and the rest in quarterly installments over the next two years.  

The other options included all pending dividends be hedged at the current exchange rate and remitted in two years, pending dividends be allowed to be invested into a profit-generating bank account, and pending dividends be allowed to be re-invested in the expansion of local subsidiaries and treated as additional foreign direct investment (FDI) from the parent company, they detailed. 

Pakistan attracted $784 million FDI during the first eight months of the current fiscal year (July 2022-June 2023) which is 40 percent less than the foreign investment last year, bearing no comparison with FDI inflow in other countries in the region.  

“For a developing country like Pakistan, FDI is expected to be over 3 percent of the GDP against the current level of less than 0.5 percent,” Aleem said. "The potential of FDI is around $9 billion."   

Due to the current economic state, the OICCI officials said, many members had decided to partially or completely shut down their operations like other businesses in Pakistan. 

“We may see a serious downfall in revenue collection from organized businesses,” Paracha said. "Therefore, we have recommended that the government should simplify the tax regime, broaden the tax base, remove the one-time burden of Super Tax from the organized sector."




Infographics by OICCI

Sharing the findings of a recent survey, the OICCI officials said 20 percent of the businesses had been negatively impacted during the last three months due to the economic situation.  

“Seventeen percent said they were impacted by rupee devaluation while 15 percent businesses have been negatively impacted by inflation or the energy price hike,” Aleem informed.  

The officials said they had recommended the government to increase tax-free income to Rs1.2 million from the current Rs0.6 million annually.   

Considering the recent World Bank forecast of 0.4 percent GDP growth this fiscal year, the OICCI estimates that most of the businesses in Pakistan, including foreign investors, will be affected and will show subdued fiscal results and thereby lower tax contribution.


Google launches ‘AI Mode’ in Pakistan to enable users to ask longer, complex questions

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Google launches ‘AI Mode’ in Pakistan to enable users to ask longer, complex questions

  • Google says AI Mode particularly helpful for exploratory tasks like comparing products, planning trips
  • AI Mode enables people to engage with it through text, voice, or images, says the search engine giant

KARACHI: Global search engine giant Google announced on Tuesday that it has launched its ‘AI Mode Pakistan,’ which enables users to receive answers to longer, more complex questions. 

AI-powered searches by chatbots and social media platforms are becoming popular as users seek quick answers to their specific problems through artificial intelligence. These help people perform several tasks and activities such as writing, crafting itineraries for vacation trips, preparing diet plans and others. 

Google’s AI Mode was first introduced in the US earlier this year. According to the search engine giant, it is now expanding globally and is resonating with people who appreciate its speed, quality, and fresh responses.

“Google launches AI Mode Pakistan in English, bringing its most powerful AI search experience, AI-powered Search, to local users, enabling faster, smarter, and more comprehensive answers to complex questions,” Google said in a press release. 

Powered by a custom version of Gemini 2.5, Google said its AI Mode allows people to ask longer, more complex questions that would previously require multiple searches. 

Google said its early testers have shown queries are already two to three times longer than traditional searches, proving it is particularly helpful for exploratory tasks like comparing products, planning a trip, or understanding complex how-tos. 

“It dives deep to answer multiple questions at once, with helpful links for further exploration,” Google added. 
 
It said AI Mode uses a query fan-out technique, breaking users’ questions into subtopics and issuing a multitude of queries on their behalf. This enables it to dive deeper into the web than ever before, helping users find relevant content. 

“What makes this experience unique is that it brings together advanced model capabilities with Google’s best-in-class information systems, and it’s built right into Search,” the search engine said. 

“Users can access not only high-quality web content but also tap into fresh, real-time sources like the Knowledge Graph and shopping data for billions of products.”

It said AI Mode enables people to engage through text, voice, or images, allowing them to take pictures of what they see and pose their queries for responses. 


Pakistan’s new virtual-assets watchdog forms specialist committees at first board meeting

Updated 26 August 2025
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Pakistan’s new virtual-assets watchdog forms specialist committees at first board meeting

  • Officials discussed withdrawing a 2018 central-bank circular barring banks from virtual currencies and tokens
  • It approved a complaint portal with the cybercrime agency and set bi-monthly meetings for the first six months

ISLAMABAD: The Pakistan Virtual Assets Regulatory Authority (PVARA) convened its inaugural board meeting on Tuesday, forming specialist committees, sharing a draft licensing framework for consultation and approving a complaint portal developed with the national cybercrime agency, according to an official statement.

Set up to regulate blockchain and virtual assets, PVARA aims to align Pakistan with global standards while encouraging innovation and investment. The board also set a bi-monthly meeting schedule for the first six months and considered withdrawing the State Bank’s 2018 circular that had directed financial institutions to refrain from dealing in virtual currencies and tokens.

“The Board deliberated on key priorities, including operationalizing PVARA to align with international Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) standards, recommending independent directors with expertise in virtual assets for approval, and establishing the Authority’s core framework,” the statement from the Office of the Minister of State on Blockchain and Crypto said.

“The Board agreed to form dedicated committees focused on sandbox experimentation, taxation policies, regulatory drafting and international engagement,” it added.

In his address, Finance Minister Muhammad Aurangzeb hailed PVARA’s launch as a “transformative milestone” in Pakistan’s economic evolution, saying the authority would help position the country as a leader in the global virtual assets economy.

He thanked the Pakistan Crypto Council for its foundational work and consultations with stakeholders.

“Today is a defining moment for Pakistan’s virtual assets ecosystem,” PVARA Chairman Bilal bin Saqib said. “PVARA will safeguard financial integrity while fostering innovation, investment, and opportunity in the virtual assets space.”

“Our goal is to build trust domestically and enhance Pakistan’s credibility as a forward-thinking player in the global virtual assets economy,” he added.

The meeting underscored its PVARA’s role in promoting the responsible adoption of virtual assets and strengthening Pakistan’s financial system against illicit activities.
 


Pakistan approves $10.8 million for Gilgit-Baltistan relief, Punjab evacuates 150,000 amid rising rivers

Updated 26 August 2025
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Pakistan approves $10.8 million for Gilgit-Baltistan relief, Punjab evacuates 150,000 amid rising rivers

  • Kasur, Okara, and Bahawalnagar among Punjab districts where mass evacuations are underway
  • In Khyber Pakhtunkhwa province, at least 406 killed and nearly 6,000 homes destroyed since Aug. 15

ISLAMABAD: Pakistan’s top economic decision-making body on Tuesday approved the release of Rs3 billion ($10.8 million) in emergency funds for flood-affected families in northern Gilgit-Baltistan, while more than 150,000 people were evacuated from Punjab’s Sutlej and Ravi river belts amid rising waters.

The decision came as the latest spell of monsoon rains continued to devastate much of the country, leaving nearly 800 people dead since late June.

Pakistan has been battered by heavy rains since the start of the monsoon season on June 26. The most devastating spell began on Aug. 15 and has killed at least 485 people since, underscoring the scale of the disaster in one of the world’s most climate-vulnerable countries.

The Khyber Pakhtunkhwa (KP) province has reported at least 479 deaths since the monsoons started, followed by Punjab with 165, Sindh 54, Gilgit-Baltistan 45, Balochistan 24, Azad Jammu and Kashmir 23, and the capital Islamabad eight, according to official figures.

“The Economic Coordination Committee approved the release of Rs3 billion for timely provision of tents, medicines, food and other essential supplies for the affected families, as well as for reconstruction of damaged infrastructure and early recovery measures to support the affected communities,” the finance ministry said in a statement after Finance Minister Muhammad Aurangzeb chaired a meeting of the ECC.

Separately, the National Disaster Management Authority (NDMA) issued an advance alert to the provincial disaster agency in Punjab, the PDMA, regarding rising water levels in the Sutlej River and potential floods. The alert prompted large-scale evacuation operations in areas near the Sutlej River.

“As a result of the advance warning and alert issued by NDMA, approximately 150,000 people have so far been moved from flood-prone areas to safe locations,” the NDMA statement said. 

These included 14,140 people from Kasur, 2,063 from Okara, 89,868 from Bahawalnagar, 361 from Bahawalpur, 165 from Vehari and 873 from Pakpattan.

The Punjab Provincial Disaster Management Authority (PDMA) also reported rising waters in the Ravi and Sutlej rivers.

“There is an extremely high flood at Ganda Singh Wala on the Sutlej River, where the inflow is 195,000 cusecs,” PDMA Director General Irfan Ali Kathia said, adding that Sulemanki on the Sutlej was at medium flood with an inflow of 104,000 cusecs and an outflow of 98,000 cusecs.

“There is a medium-level flood at Jassar with an inflow of 90,000 cusecs and a low-level flood at Shahdara with 40,000 cusecs,” a PDMA spokesperson said, warning that between 60,000 and 70,000 cusecs could pass Shahdara later on Tuesday night.

“Citizens in riverbeds should immediately move to safe places,” Kathia said, adding that mosque loudspeakers were being used to alert residents and instructing local administrations “to ensure no negligence in protecting lives and property.”

Punjab Relief Commissioner Nabeel Javed said flood relief camps had been established in affected areas and that “all basic facilities and medicines will be provided.” He also cautioned against landslides in Murree, Galiyat and other northern hill areas and advised residents to avoid unnecessary travel.

HEAVY TOLL IN KP

In northwestern Khyber Pakhtunkhwa, authorities reported widespread destruction as flash floods and house collapses swept through multiple districts. At least 406 people have died and 245 have been injured since Aug. 15, while nearly 5,900 houses were completely destroyed and more than 2,800 partially damaged, according to the provincial situation report.

The district of Buner was among the worst hit, with the local administration reporting over 20 bodies recovered in recent days and around 50 people still missing. Rescue operations remain underway with support from district officials, the army and humanitarian organizations.

Across the province, dozens of bridges, culverts, irrigation channels and roads have been washed away, cutting off access to remote areas. Relief efforts include the distribution of cooked meals, dry food rations, tents, and medical supplies, with mobile health teams operating in flood-affected zones.

Officials say the ongoing monsoon spell is expected to last until at least September 10, while the NDMA has warned the rains could rival the scale of the catastrophic floods of 2022, which killed more than 1,700 people and caused over $30 billion in damage.

Annual monsoon rains are crucial for Pakistan’s agriculture and water supply but in recent years have also unleashed devastation, intensified by shifting climate patterns.

Despite contributing less than 1 percent of global greenhouse gas emissions, Pakistan ranks among the countries most vulnerable to climate change. In recent years it has endured increasingly erratic weather, including droughts, heatwaves and record-breaking rains that have caused widespread loss of life and damage to property.

Experts warn that without urgent adaptation and mitigation measures, the human and economic toll of climate change in Pakistan will only deepen in the years ahead.


Palestine at forefront as Pakistan’s deputy PM meets Muslim leaders on sidelines of OIC session

Updated 26 August 2025
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Palestine at forefront as Pakistan’s deputy PM meets Muslim leaders on sidelines of OIC session

  • Ishaq Dar meets foreign ministers of Türkiye, Egypt and Algeria, says talks focused on Gaza ceasefire and aid
  • He also discussed Gaza’s reconstruction with Saudi, Iranian and Malaysian officials in Jeddah a day earlier

ISLAMABAD: Palestine remained at the forefront as Pakistan’s Deputy Prime Minister Ishaq Dar met the foreign ministers of Türkiye, Egypt and Algeria on the sidelines of the 21st Extraordinary Session of the Organization of Islamic Cooperation’s (OIC) Council of Foreign Ministers (CFM), according to his social media posts on Tuesday.

The session in Jeddah, called by Palestine, Türkiye and Iran, focused on war in Gaza, leading to a resolution condemning Israeli plans for full military control of Palestinian enclave, demanding a ceasefire, lifting the siege and opening crossings for unhindered aid.

Dar mentioned his interactions with fellow leaders from other parts of the Muslim world, sharing the crux of conversations with them.

“Had a meaningful interaction with my brothers, FM of Egypt H.E. Badr Abdelatty and FM of Algeria H.E. Ahmed Attaf @AhmedAttaf_Dz, on sidelines of 21st extraordinary session of the #OIC CFM,” he said in a post.

“We discussed the grave situation in Palestine, stressing the urgent need for humanitarian access, a ceasefire, and lasting peace, while underscoring the importance of unity within the Muslim Ummah in these challenging times,” he added.

Dar said he also reaffirmed Pakistan’s commitment to strengthening ties with Egypt and Algeria through enhanced connectivity and broader cooperation across diverse fields.

Earlier, he met Turkish Foreign Minister Hakan Fidan, with both affirming solidarity with Palestine and highlighting the need for urgent humanitarian relief amid a worsening crisis in Gaza.

“We also reaffirmed the brotherly Pakistan-Türkiye relations, and looked forward to further strengthening our multifaceted cooperation,” he said.

Dar also discussed the ongoing situation in the Middle East a day earlier with other Muslim leaders, including the foreign minister of Bangladesh, Malaysia, Somalia, Iran and Saudi Arabia, alongside reviews of bilateral cooperation.

He highlighted the need for uninterrupted humanitarian access to Gaza. Additionally, he called for the reconstruction of the area and discussed way of addressing the conflict for lasting peace in the region.


Pakistan bought initial 30,000 tons sugar in tender, traders say

Updated 26 August 2025
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Pakistan bought initial 30,000 tons sugar in tender, traders say

  • The government has approved plans to import 500,000 tons of sugar to stabilize prices
  • Traders say validity of other price offers has been extended, with more purchases possible

HAMBURG: Pakistan’s state trading agency TCP has purchased an initial 30,000 metric tons of white sugar in an international tender seeking around 200,000 tons which closed last week, European traders said on Tuesday.

The validity of other price offers submitted in the tender has been extended until Wednesday, August 27, so more purchases are seen as possible, traders said.

The initial 30,000 ton purchase was believed to have been made from Al Khaleej Sugar for medium grade sugar at an estimated $582.50 a ton c&f, they said.

Reports reflect assessments from traders, and further estimates of prices and volumes are still possible.

The tender sought offers for fine, small and medium grade sugar, all for arrival in Pakistan by October 31.

The TCP can consider offers for several days in tenders before deciding whether to purchase.

Offers in the tender were submitted on August 21. The lowest offer is not always accepted if other conditions associated with it are not seen as attractive.

Pakistan’s government has approved plans to import 500,000 tons of sugar to help to maintain price stability after retail sugar prices rose sharply.

The TCP bought a total of 105,000 tons in its previous sugar tender reported on August 14.