Pakistan's economy to collapse soon? BIG multinational companies like Uber, Microsoft, P&G are shutting down operations due to...

Big setback for Pakistan's economy as big multinational companies are exited the country. MNC consumer goods giant Procter & Gamble (P&G) has announced it will shut down its manufacturing and commercial operations in Pakistan. P&G has taken a big step to shift to a third-party distribution model in a major restructuring plan. Not just P&G, several other multinational corporations (MNCs) including Shell, Microsoft, Uber, Eli Lilly, and Yamaha Motors, have scaled back or exited Pakistan in recent years. Pakistan's economy is already instable, with weak currency.  Now the restructuring decisions of companies may lead to mass lay offs, rising the unemployment rate in Pakistan. Multinational companies are exiting Pakistan, by either selling stakes or haltering operations, but why? In a Dawn report, many Pakistani analysts pointed out the few reasons why these MNCs are exiting Pakistan.

Pakistani analysts list down reasons

• The first reason cited by Pakistani analysts in Multinational companies undergo major restructuring decisions that impacts their geographical focus. Analysts have pointed out that the reasons lie in the restructuring plans of MNCs and not any domestic hindrances. 
• The second reason is that strict regulatory in Pakistan leads to long delays, forcing sector specific companies to leave. One said that there is sector-specific exodus, like in Pharmaceuticals, due to some local polices. High taxes, unethical practices, regulatory enforcement have made Pakistan a less attractive destination for foreign investment. 
• Third is that MNC operations remain running in the country, despite their exits, and thus, do not have a larger impact as assumed. This way MNCs stay connected to local consumers while minimizing exposure to regulatory and currency risks.
• One analysts points out that MNCs are choosing to consolidate their facilities into global hubs like UAE and Singapore, rather than having presence in every country, so Pakistan is not in isolation when MNC exits are concerned.