In any economy, the lion’s share of investment typically originates from the domestic private sector, with foreign direct investment (FDI) often trailing behind as a follower rather than a leader. This holds because local entrepreneurs possess intimate knowledge of market conditions, regulatory landscapes, and risk profiles, enabling them to allocate capital more efficiently than outsiders.

In Pakistan, however, government authorities are grappling with an even more fundamental challenge: attracting investment from their own citizens.

The Privatization Commission, for instance, faces demands from domestic entrepreneurs that mirror those typically voiced by foreigners: stringent guarantees on returns, legal protections, and operational autonomy, underscoring a profound erosion of confidence in the home market.

Consider the recent reluctance among potential buyers of power distribution companies. Groups once eager to acquire these assets are now rebuffing the Privatization Commission, arguing that sustainable investment cannot thrive under duress or “at gunpoint.” Instead, they insist on dictating their own terms, as evidenced by one consortium bidding for Pakistan International Airlines (PIA), which demands arbitration rights in London under the English law, a clause that hedges against domestic judicial uncertainties and currency risks.

Such stipulations reflect a classic economic response to perceived institutional weaknesses: investors seek to........

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