2. In its classic definition, FDI is defined as
“A company from one country making a physical investment into building a
factory in another country.”
In other words:
FDI is a major source of external finance which means that countries with
limited amounts of capital can receive finance beyond national borders from
richer countries.
3. FDI has been recognized the most powerful and strategic weapon for
transforming a traditional economy of a nation into a modern economy by
accelerating the pace of growth and development. There have been many
examples wherein the FDI inflows have boom the economies of many countries.
For example, China, Malaysia and South Korean economies.
FDI has emerged as not only a major source of much needed capital but is also
considered to be a major channel for the access to advance technologies,
organizational and managerial skills.
4. Year Total FDI
2005-06 3,521.00
2006-07 5,139.60
2007-08 5,409.80
2008-09 3,719.90
2009-10 2,150.80
2010-11 1,739.40
2011-12 741.5
2012-13 70.8
Total 26,248.8
Investors :
The United States was the top investor with $490m. It was followed
by The Netherlands, $269.2m; Britain, $214m; UAE, $182m; Switzerland,
$126m; Singapore, $93.5m; Cayman Islands, $69.2m; and others, $328m.
5. Terrorism
Counter-terror operations
Energy crisis
Terrible law and order situation
Decline in economic growth
Bad planning and government
policies
6. In developing economy like Pakistan,
FDI is beneficial in many ways, like
Heighten the economic growth
Increase the productivity
Additional capital investment
Provide employment
High wages
Boost up the industry
Fulfill technical and managerial
skills
Link to he global market
