Channelizing FDI towards real economy

"The study concludes that manufacturing and export-oriented sectors need to attract foreign investments. Foreign investors’ outlook explains that their priorities have market-seeking behavior and are skewed towards a few sectors. To channelize efficiency-seeking FDI towards the real economy government should enhance its focus to provide an enabling environment, reduce the cost of doing business, de-regulate, and create a level playing field for all stakeholders. To increase market competitiveness, efficiency-based and time-bound incentives should be given to foreign investors. Domestic investment stimulates foreign investment. There is a need to redirect the flow of funds from sectors whose productivity levels are derived from speculation activities rather than real production. Some recommended measures are taxing the real estate, reviving PIDC, PICIC and NDFC institutions, and initiating industrial development programs through schemes such as REMIT."