Pakistan’s paradox: Stability without investment |
https://arab.news/j6enx
At the start of 2026, Pakistan’s economy is finding a firmer footing. Interest rates are low, the currency is stabilized, and equity market is buoyant. IT exports have hit record highs. Reforms backed by the International Monetary Fund (IMF) appear more credible than at any point in the past decade.
Yet beneath these reassuring signals lies a striking contradiction. Foreign direct investment (FDI) into Pakistan remains negligible. Between July and December 2025, foreign direct investment (FDI) fell by 43 percent compared with the same period last year. For a country that relies heavily on borrowing to stabilize, foreign investor behavior is becoming impossible to ignore.
This is the Pakistan paradox: domestic stabilization in the absence of meaningful international investor participation, with some foreign firms quietly exiting.
This is the Pakistan paradox: domestic stabilization in the absence of meaningful international investor participation, with some foreign firms quietly exiting.
- Vaqar Ahmed
Official messaging around this contradiction fails to convey what is different. Established businesses point to familiar constraints: security concerns, long term political uncertainty, regional volatility, high taxes, ambiguous energy policies and high overall costs of doing business. Yet this misses the deeper reality. Pakistan is not simply experiencing cyclical investor caution; it is........