Foreign cos reverse remittances up 11pc
Tuesday, April 08, 2008
By Shahzad Anwar
KARACHI: Repatriation of profits from the country rose by 10.9 per cent during the first eight months of fiscal year 2007-08.
According to State Bank of Pakistan (SBP) from July to February 2007-08, companies operating in the country with foreign shareholding sent $556.6 million abroad compared to $501.9 million in the corresponding period of last fiscal year.
The power sector was the major contributor to this outflow as foreign thermal power generating companies repatriated $122 million during July-Feb 2007-08 against $95.7 million in the same period of last year. Foreign communication companies repatriated $84.3 million in first eight months. Foreign oil and gas exploration companies were at third position sending back $60.5 million compared to $35.1 of last year depicting a surge of 72.4 percent.
Though a 15.7 percent negative growth was witnessed in profit and dividend outflow in financial business during aforesaid period but in terms of quantum it is still at higher side with outflow of $52.1 million against $61.8 million of preceding year.
Repatriation of profits by companies making pharmaceuticals & OTC products rose from $4.7 million to $19 million. Chemicals manufacturers sent back $28.4 million compared to $32.1 million. Tobacco and cigarettes sector sent abroad $27.3 million as compared to $15.4 million of last year. Food sector recorded a 9.67 percent decline in profit outflow, which stood at $17.71 million in FY08 compared to $19.60 million in the corresponding period of previous year.
Transport equipment (automobiles) companies repatriated $13.8 million, which was 72.1 percent up from $8 million in matching period of last year. A flight of $48.2 million was recorded in the form of profit and dividend of petroleum refining companies compared to $45.8 million of last year.
Fertiliser sector sent back $2.7 million in terms of profit against $3.8 million of previous fiscal whereas a decline of 1.8 percent was witnessed in the profit outflow of cement companies, which stood at $5.6 million against $5.7 million.
Though, Wall Street Journal last week termed Pakistan a capital magnet, foreign investors seem interested in sectors where repatriation of profit could be ensured easily by taking advantage of liberal policy of allowing foreign companies to send 100 percent profit back to their countries.
Mostly the foreign investors are looking for opportunities in services sector and capital markets where unprecedented profits are being made as compared to manufacturing or agriculture sectors. The foreign investment in capital markets or services sector does not contribute in real economic growth of the country nor does it create new job opportunities.
Foreign cos reverse remittances up 11pc