A wave of departures by global heavyweights is shaking Pakistan’s investment scene, with Finance Minister Aurangzeb blaming exorbitant taxes and crippling energy expenses. In a candid address, he revealed how these factors have driven away key players, threatening jobs and growth in an already fragile economy.
Take Procter & Gamble and Colgate-Palmolive, for instance—both have shuttered factories citing unsustainable operational costs. Energy prices, now among the world’s highest at over 20 cents per kWh for industries, combined with chronic blackouts, have rendered Pakistan uncompetitive. The minister noted that corporate tax rates hovering at 39%—higher than India’s 25.17%—further deter newcomers.
This isn’t just anecdotal; data shows FDI inflows dropped to a meager $1.3 billion last fiscal year, the lowest in a decade. Aurangzeb linked this to policy inconsistencies and a vicious cycle of subsidies that inflate tariffs. Multinationals are pivoting to alternatives: garment makers to Ethiopia, electronics firms to Indonesia.
While the administration touts IMF-backed reforms like broadening the tax base and privatizing loss-making utilities, skepticism abounds. Labor unions warn of mass layoffs, with over 100,000 jobs at risk. As global supply chains realign, Pakistan must overhaul its energy sector and fiscal framework to stem the tide—or risk isolation in the world economy.