The 'official picture of the Pakistani economy, where the foreign remittances and foreign exchange reserves are at an all-time high, the exchange rate is stable, and the current account is surplus, is at odds with the behaviour of the investor, who is voting with his feet. Not only is foreign direct investment down, but the Pakistani investor is shifting his capital to Bangladesh and China. Not only does this reflect the investors fears of the worsening security situation caused by the participation in the war on terror, it also reflects their being hit by the shortages of electricity and gas. However, these are all listings of actions to be taken by government, so that a conducive business atmosphere is created. An aspect the government also controls is the interest rate, which is maintained at too high a level, even though the real reason has been the government continuing to borrow from the banking system to cover its deficits, to the exclusion of enterprises, which are finding this another reason to abandon the country. This flight of capital would be dangerous anyhow, but with the parlous state of the economy, would be potentially disastrous. However, it is not only difficult and futile, but also unjust, to ask investors to face disaster here, instead of going abroad and seeking other avenues for investment. It is the task of the government to know what must be done to stop the haemorrhaging. The fairly obvious first step is to make appropriate changes in economic policy, and if necessary in foreign policy as well. It must be remembered that leaving economic policymaking to the IMF is not meant to boost the economy, but to ensure the governments economic subordination to the USA, something all the more needed for it to ensure that Pakistan stays on its side in its war on terror. The very first thing is for the government to stop its extravagance and make sure that its members stop enjoying lavish lifestyles at the taxpayers expense. Then it must take the steps needed to ensure investment stays and is even attracted here. It must keep in mind that people are in business for profits, not to subsidise any country. With the Finance Ministry admitted that it made an error of Rs 38 billion in its collection figures, it seems the governments figures are not reliable, another reason for potential investors to stay away. The government must not rely on a patchwork of taxation measures as at present, and must remember that investment also depends on security as well as reliable provision of electricity, and participation in the war on terror in exchange is poor investment policy.