The Roshan Digital Accounts for overseas Pakistanis have crossed $1 billion. Understandably, Prime Minister Imran Khan is pleased about this, and had tweeted the success. However, this should not be assumed to be a substitute for Foreign Direct Investment (FDI), which has declined in recent times, and to which there are significant barriers, which have not been removed, even though this was one of the planks on which the present government was elected. The present government should not be too impressed with itself, for it still has to establish the sort of trust which would let Pakistanis send Pakistan the sort of money that the PTI rather overoptimistically predicted would flow in once Mr Khan was elected. However, the PTI would be deluding itself if it thought that the success of the RDAs was because that trust had been established. A closer examination would show that the money came in because the RDA framework allowed for innovative banking, and the creation of a banking product that was more attractive to the depositor than others on offer.
The problem is that the barriers to FDI remain. While there has been much work done successfully towards cleaning up the taxation problems that acted as a brake, some area s have not been addressed, such as political stability, which makes potential investors wary about whether their investments might be hit by some radical revision in public policy. There is also the fear of changes made solely to victimize a party which had invested under a previous (rival) government. The PTI has carried outs its share of actions which have given foreign investors the jitters, with the result that instead of foreign investors coming in, there have been instances of those who have already invested here, leaving.
Foreign companies cannot be forced to invest. However, they can be persuaded. They cannot be persuaded by appeals to patriotism. As a matter of fact, overseas Pakistanis are left cold by such appeals. The reason the RDAs succeeded was that they were good banking products. In the same way, FDI will only occur if companies fell they will make some money. The government must never forget that.
