According to State Bank of Pakistan (SBP) the outflow of profits and dividends from the country has increased to $1.773 billion in the first 10 months of FY18, Dawn reported on 2 June 2018. The inflow of foreign investments is not much higher than the payments being made on them, thus creating a serious problem for the country as it struggles to maintain its foreign exchange reserves. The SBP said the country has received $2.237bn as foreign direct investment (FDI) during July-April FY18 while payments on FDI were $1.521bn, compared to $1.234bn in the same period of last fiscal year. The net outflows during the 10 months of FY18 stood at 16.6 per cent higher than the previous year, indicating that the figure could reach $2bn in the remaining two months.
The capitalist system under the watchful eyes of the colonialist tool, the IMF, dictates concessions to attract foreign investment and funding. Concessions include ownership rights over local resources, waivers in taxation to increase competitiveness, ease of taking profits out of the country and high interest on loans, as is seen in the CPEC conditions. Local businesses and industries are already complaining that they have not been provided concessions which the Chinese companies are enjoying under CPEC, so they cannot compete with them. In fact, matters are made more difficult for local investors to operate, forcing them to abandon projects to make way for foreign investors. Over time the Western colonialist hold over the economy is growing alongside a new Chinese one.
The Khilafah will encourage local investors with all means at its disposal to strengthen the economy. It will mobilize revenues to ensure that there is state and public ownership of great chunks of the economy that is presently being handed over to foreigners. It will end the heavy, unstable and perilous dependence on foreign funds, franchises and investment. Hizb ut-Tahrir in its Introduction to the Constitution, Article 165 adopted that, “Development and investment by foreign funds within the State are forbidden. It is also prohibited to grant franchises to foreigners.” It further stated, “As for the prohibition of development through foreign funds this is because it leads to Haram in agreement with the rule: “The means to something forbidden is also forbidden”, and the strongest possibility is enough to make something prohibited…”
Written for the Central Media Office of Hizb ut-Tahrir