RESEARCH REPORT

FOREIGN DIRECT INVESTMENT IN PAKISTAN

SUBMITTED TO DR. ABDUL WAHEED

SUBMITTED BY BEENISH AKHTER EP-100908

DATE
4TH APRIL, 2012
University of Karachi, Economics Department Evening Program

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ABSTRACT: Foreign Direct Investment (FDI) is often seen as an important catalyst for economic growth in any developing county. FDI consists of a package of capital, advanced technology, management skills, job opportunities, market admittance and increased government revenue. The countries having sector with the comparative advantage, for them the FDI would create economies of scale and association effects and raise productivity. The present research report was conducted with the aimed to study the FDI in Pakistan. It has been observed that inflow of FDI in the year 2003 to 2008 reached US$ 5410 million as highest if compared with year 2010 FDI inflows in Pakistan. Further, it has been observed that FDI inflows in Pakistan with the other developing countries in the world are not attractive. It has also found that in Pakistan the economic groups which are more desirable are chemicals, petroleum refining, oil and gas exploration, power construction, transport and communication. The Government of Pakistan is well informed with the significance of FDI; therefore, the concerned authorities should design those policies which aim to encourage the FDI inflow in the country, and it will optimistically influence the economic performance of the Pakistan.

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INTRODUCTION: FDI termed as foreign direct investment. The Foreign direct investment is defined as a long term investment by a foreign direct investor in an organization inhabitant in an economy. PERCEPTIVE OF FOREIGN DIRECT INVESTMENT:

Foreign Direct Investment (FDI) plays an astonishing, extraordinary and growing role in the global business today.

Foreign Direct Investment can formulate available a firm with innovative markets and marketing channels, cheaper production conveniences and facilities, access to new knowledge, technology, products, skills and financing. For a mass country or the foreign firm which receives the investment, it can endow with a source of new technology, capital, processes, organizational techniques and management skills. Foreign Direct Investment can further more provide a well-built, strong impetus to economic development.

STANDARD DEFINITION: A company from one country making a physical investment into building a factory in another country.

HISTORY: In the past decade, Foreign Direct Investment has move toward to play a foremost and most important role in the internationalization of business. Reacting to changes in technology, growing liberalization of the national inflexible frame work governing investment in enterprises, and changes in capital market profounder changes have occurred in the size, extent and methodology of Foreign Direct Investment.

The sea changes in trade and investment policies and the regulatory surroundings globally in the past decade, as well as trade policy and tariff liberalization, moderation of restrictions on foreign
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investment and accomplishment in many nations, and the deregulation and privatization of many industries, has almost certainly been the most considerable catalyst for Foreign Direct Investments expanded responsibility.

The most profound effect had been seen in developing countries, where yearly Foreign Direct Investment flows have increased from an average of less than $ 10 billion in the 1970s to a yearly average of less than $20 billion in the 1980s, to explode in the 1990s from $26.7 billion in 1990 to $179 billion in 1998 and $ 208 billion in 1999 and now comprise a large portion of global FDI. Proponents of foreign investment point out that the exchange of investment flow benefits in mutual aid the home country. FUNDAMENTAL TYPES OF FDI: Basic types are as follows:

Greenfield Investment:

Direct investment in new conveniences or the expansion of existing facilities is called Greenfield. Greenfield investments are the prime target of host nation promotional efforts for the reason that they generate new production competence and jobs, impart technology and know-how, and can go in front to linkages to the global market place. Yet, it often does this by crowding out home industry. Another downside of Greenfield investment is that profits from production do not feed back into the local economy, but as a replacement for the multinationals home economy.

Mergers And Acquisitions:

an A mergers and acquisitions a transfer of existing belongings from local firms to foreign firms takes place; the primary type of Foreign Direct Investment cross border merges occurs when the assets and operation of firms from different countries are combined to establish a new legal individual. Unlike Greenfield investment, acquisitions provide no extended term benefits to the local economy and Meaning that the money from the scale could never reach the local economy.

Horizontal Foreign Direct Investment:

Horizontal foreign direct investment is the investment in the equivalent industry aboard as a firm operates in at home.

Vertical Foreign Direct Investment:

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Vertical Foreign Direct Investment takes two forms:

(I) Backward Vertical Foreign Direct Investment: Where an industry aboard provides inputs for a firms domestic production process.

(II) Forward Vertical Foreign Direct Investment:

Forward Vertical Foreign Direct Investment is an investment in which an industry aboard sells the outputs of a firms domestic production.

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DETERMINANTS OF FDI: Foreign Direct Investment is the investment assessment of profit maximizing firms facing worldwide antagonism, where considerable differences in cost structures (due to say, factor of productivity, remuneration differential) gives explanation for cross border investment and production.

(A) INSITITUTIONAL FEATURES OF THE MASS COUNTRY: Institutional features of the mass country degree of political stability and the government involvement in the economy.

(B) PROFITABLE FACTORS: Economic factors trade and investment establishment the degree of openness of the host countries, fix and variable costs production relocation. It is the measure of monopolist competition, which prevents the entry of other.

(C) POLICY ASSOCIATED FACTORS: Policy related a factor is the policy that restricts the degree of foreign ownership, (temporary or permanent) the transfer of funds of interest, dividends and cost for technology and the shares allowed to foreign owned firms through restrictions on capital repatriation, least amount investment, etc.

(D) DISTINCTIVENESS OF THE LABOR FORCE: Following are the characteristics of the labor strength. (I) (II) (III) Education Skills Technology, etc.

MOTIVES OF FOREIGN DIRECT INVESTMENT:

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Foreign direct investment can also categorized based on the motive behind the investment from the perspective of the investing firm:

Resources Seeking: Investment in which seek to acquire factors of production that are more efficient than those obtainable in the home economy of the firm.

Market Seeking: Investments which aim at either penetrating new markets or maintaining existing ones.

Efficiency Seeking: Investments which firms hope will increase their efficiency by exploiting the benefits of economies of scale and scope, and also those of common ownership.

SIGNIFICANCE OF FOREIGN DIRECT INVESTMENT: Making a direct foreign investment allows companies to accomplish several tasks:

Avoiding foreign government pressure for local production. Circumventing trade barriers, hidden and otherwise. Making the move from domestic export sales to a locally-based national sales office. Capacity to increase total production capacity. Opportunities for co production, joint ventures with local partners, joint marketing arrangements, licensing, etc.

POLICIES TO ATTRACT FOREIGN DIRECT INVESTMENT: Foreign direct investment has various reforms and strategies have been implemented, with mixed results. Some are critical of the elevated cost of many of these initiatives, arguing that it would be supplementary rewarding to improve a countrys general business environment. The many different methods used by policymakers to attract foreign direct investment and their effectiveness are as follows:

Providing targeted fiscal incentives, such as tax concessions, cash grants, and specific subsides; Improving domestic infrastructure;
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Promoting local skill development to meet investor needs and expectations; Establishing broad reaching Foreign direct investment promotion agencies; Improving the regulatory environment and decreasing red tape; and Engaging in international governing arrangement.

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LITERATURE REVIEW: The Number of studies has been written on FDI (Foreign Direct Investment) in Pakistan. Some of them analyzed the relationship between FDI inflows and economic Growth, some showed relationship between FDI and Policy issues and Operational Implications, some of them demonstrated the FDI and its impact on Trade etc, The Gist of All Studies is around the Foreign Direct Investment in Pakistan. All these relationships help to understand the FDI Trends in Pakistan. An Economist (Nazir Saeed from Islamia University Bahawalpur, March 2001) presented the economic analysis of Foreign Direct investment and its impact on trade in Pakistan. He explained that the policies of host countries play an important role in determining of assessment of foreign investors in Pakistan. According to him the FDI policy frame work in early 1980s is the most important development era (industrial Policy Statement 1984). During this period the Pakistani government set up export processing zone to encourage foreign direct investment in the export sector. He also mentions the measure which government have taken 1990s to build the investors confidence and for accelerating the foreign investment, these incentives ranges from reduced or zero import duty on machinery and equipment, exemption from levy of tax on income, fully developed infrastructure, one window operation, supply of utilities of high quality and availability of fiscal and monetary incentives. According to Him following policy incentives are now available to foreign investors;

Foreign Exchange Controls have been allowed participation in Local Project on 100% Equity basis. There is no requirement for having local partners, now full repatriation of capital and dividend is allowed. Ceiling on payment of royalties and technical fee have been abolished. Work permit restrictions on expatriate managers and technical personnel working in industrial undertakings have been withdrawn. Number of Specified Industries requiring government sanction has been reduced to four as; o Arms and ammunition.
o

High explosives,

o Radio-Active Substances.

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o Security Printing, currency and, mint (establishment of new units for the manufacture of alcohol, accept industrial alcohol is banned. There is no requirement for obtaining NOC (No Objection Certificate) from Provincial government for locating the Project any where, accept the areas which are notified as negative areas. (Nazir Saeed, Islamia University Bahawalpur)

Had come across a research writing (By Minh Hand Le and Ali Ataullah, Lahore School of Economics, Vol. 7, No.1) on Foreign Direct Investment trends in Pakistan. They studied the trends of FDI inflows to Pakistan and found that the increase in FDI during the last two decades is not as sharp as in other in East Asian developing economies. They explained the history of FDI inflows in Pakistan in two phases; the first Phase is characterized by the Steps of Government of Pakistan to attract the Foreign direct investment through the Foreign Private Investment Act 1976 (Before this 1976 Act, Private Foreign Investment was regulated by the Governments Statement of Industrial Policy issued in 1959), in First phase the priority is given to projects that were capital intensive, advanced in technologically and those which were supposed to strengthen the BOP ( Balance of Payment) Position, Several others steps which includes one window facility etc; The Second Phase started in the Late 1980s with the elimination of Controls on capital flows, income remittances and transfers, and ownerships, Tax Holidays and tariff concessions also granted to foreign investors. They further discussed the Post 1988 Period, which was characterized by the privatization and liberalization processes, which helped in accelerating the inflow of foreign investment from US$185.6 million in 1988 to US$939 Million in 1996 (Data From 1970-1998 World Development Indicators and Data From 1999-2001 SBP Annual Report, 2001), In 1998 these FDIs dropped to $500 million, the decline in FDI from 1996 can be attributed to a number of problems like economic sanitations after the nuclear tests, freezing of foreign currency accounts, independent power producers controversy etc, to overcome these problems and issues and to restore the confidence of foreign investors the government of Pakistan taken the plenty of policy measure, chiefly implanted acts were New Investment Policy 1997 and the Corrupt Business Practices Ordinance 1998. For Studies Conducted in Pakistan a study was Made By (Shabir And Mahmood, 1992) analyzed the relationship between Foreign Private Investment and Economic Growth in Pakistan, The Study used the data for 1959-60 to 1987-88; the study concluded that net foreign private (FPI) and disbursements of grants and external loans had a positive impact on rate of growth of real GNP, notably they did not treat FDI as a Separate Variable.

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Further (Ahmed, Butt, And Alam, 2003) examined the causal relationship between FDI, exports and output over the period 1972 to 2001 in Pakistan, they found significant effect from FDI to domestic output. An effort has been made (By Muhammad Azam, Assistant Professor of Economics, Abdul Wali Khan University Mardan-Pakistan & Naeem-ur-Rehman Khattack, Dean, Faculty of Social Science, University of Peshawar-Pakistan; Journal of Social Sciences, Vol |III, Number II, 2005) to study the trend and pattern of FDI in Pakistan. They found that almost Seventy Percent of FDI in Pakistan came in to Oil and gas sector, telecommunication sector, chemical sector, power sector, textile sector, and in banking & Finance. About Sixty percent of FDI came from USA, UK, J Japan, Switzerland, UAE and Netherlands, The inflow of FDI in Pakistan has been increased since 2001, because of the efforts made by Government of Pakistan by offering attractive incentives, provision of investment in pleasant environment and maintaining economic stability in the home. Two Economists (Ashfaque H. Khan, Economic Advisor to Ministry of Finance-Pakistan & YunHwan Kim, senior Economist at the Asian Development Bank, 1999) has made an attempt to study the Foreign Direct Investments Policy Issues and implications in Pakistan. According to their study Pakistan has implanted different Policies at different times with a changing focus either on public sector or private sector to achieve the objective of increased foreign resources. During 1960s Government policies were intended to at accelerating the Private sector, while during the 1970s the public sector was given the dominant position. Again in 1980s to 1990s the private sector was given a leading role, in late 1990s Government of Pakistan adopted a liberal, market oriented policies which aimed at encouraging private sector role, as private sector was declared an engine of economic growth. Further the Foreign investor was offered attractive packages of incentives. The article on Foreign Direct investment & Pakistan (by S.Hasan Asad, 2002) brings our attention to high taxes, frequent hikes in petroleum, gas and electricity prices, uneducated, undisciplined and unskilled labor force drives away foreign investors. Another Paper (By Ashfaque H. Khan, Economic Advisor to Ministry of Finance-Pakistan, 1997) attempts to identify the reasons and problems that why Pakistan hasnt been capable to magnetize large FDI despite number of liberalization measures. He find out a number of factors that are responsible in Pakistan for low FDI , which are the lack of political stability, unsatisfactory law and order situation in Karachi (Largest Industrial & Commercial Centre, Trade Port), and the macroeconomic imbalances, the corrupt bureaucratic process, unfriendly business environment, overprotective labor laws, lack of trained, skilled labor force etc.

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DATA ANALYSIS:

Explanation: By using the data from 1989 to 2009, I construct the above graph which shows the net FDI of Various countries. And as you can see in the above graph Pakistan is the country in which Net FDIs are very low as compare to other developing countries.

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Foreign Direct Investment Classified by Economic Groups

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Explanation: By using the data from 2002 to 2010, I put up the above graph which shows the Pakistans various important economic groups FDI percentages separately. And one thing that is found in the data of foreign direct investment classified by economic groups is that Oil & exploration got the largest attraction by foreign investor, and the second largest sector that is identified by foreign investor is communication sector.

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Explanation: By using the data from 2000 to 2010, I raised the above graph which shows the FDIs trend of Pakistan, as you can see in the graph from 2005 to onwards there is an increasing trend, and that is because of Governments policies and initiatives to attract the foreign direct investment.

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CONCLUSIONS:
Foreign direct investment (FDI) is the key source and most effective mean of shifting advanced technology and knowledge from home country to host country. As Pakistan is a developing country and characterized by low income level, lack of skilled & educated workforce, low capital, poor level of Industrialization, less saving, rapid growth in population, huge burden of external debt, deficit in balance of payment and agriculture based economy etc, the local resources are insufficient to meet the development need s of country; therefore the FDI could be used as an important tool to overcoming the said problems. The benefits of the FDI to a host country are advanced technology, technically sound; educated; skilled work force, friendly and save business environment , increase in production, increased job opportunities, bring overseas currency into a country for investment in different attractive sectors of the host country. The worsen side of the FDI is that it not always contributes positive effect countrys balance of payment. However the FDI may increase the volume of export, MNCs (multinational companies) imports advanced capital goods to the host county for operation. What if the value of imported capital goods is greater than those of the value of final goods exported by the host countries, the FDI would have negatively affect the balance of payment. Further, the FDI would be unsuccessful to increase the job opportunities if investment from abroad takes place in capital intensive goods. As a whole the effect of FDI is depend upon the contributing factors and it might be negative but the overall net effect is assumed to be positive.

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17 | P a g e RECOMMENDATIONS: Following are some recommendations that could be fruitful to increase foreign direct investment in Pakistan. Political stability is very important element for attracting more FDI, in Pakistan there is a political stability lack from almost last eight years, which causes less assurance on countrys economy by foreign investor. Satisfactorily law and order situation will also be help to attract more FDI, especially in Karachi. As Karachi city is the largest industrial and commercial hub and has the only natural port of the country. Therefore, the law and regulations should be transparent, simplified and realistic. The Media of our country presents Pakistan as the most corrupt nation in the universe, who encourages terrorist activities, uses child labor etc, this will definitely not magnetize the FDI. So, Government of Pakistan should define the freedom of media. The macroeconomic imbalances or instability i.e. the slow process of economic activities along with the inconsistent economic policies would discourage the foreign investors. So, Government should take initiatives to balance and stabilize the policies and restore the confidence of investors. The inappropriate environment of business, poor bureaucratic process, and inadequate infrastructure of Pakistan discourages the FDI, because the investor is unable to understand the initiative of investment. There is a lack of skilled, educated, technically trained workforce in Pakistan. Together with that lacks there are so many overprotective labor laws which prohibit the foreign investors to enter in Pakistan. In this regard Government should invest more in the areas of education and rationalize the labor laws. There should be partnership between public and private sector that helps to restore the confidence of foreign investor, it can be done by formulating the forums where public and private sectors sits together and identify the areas of weaknesses, and the federal body should govern or chair the forum so that planning can be executed. Government of Pakistan should devise official agencies and strategies that pull the FDI in Pakistan. There are a lot of indirect taxes levied in Pakistan that discourages the foreign investor, there is need to reduces and eliminate taxes which are unnecessary; like flood tax, as government was receiving aid from foreign for flood victims so there were no need to levied that kind of tax. Lastly the import tariffs on heavy duty machinery and plant equipments discourage the investment. There is need to review the trade tariffs and policies.

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Flows of Net Foreign Direct Investment in Selected Countries

(Million Dollars) Countries Year Pakistan India Philippines China Malaysia Hong Kong USA UK

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

209 216 246 335 306 354 442 1,101 682 601 472 469 322 484 534 1,118 2,201 4,273 5,590 5,438 2,387

252 236 155 261 586 973 2,144 2,426 3,577 2,635 2,169 3,584 5,472 5,626 4,323 5,771 7,606 20,336 25,483 41,315 34,577

563 530 544 228 763 1,591 1,478 1,517 1,222 2,287 573 2,240 195 1,542 491 688 1,854 2,921 2,916 1,544 1,948

3,393 3,487 4,366 11,156 27,515 33,787 35,849 40,180 44,237 43,751 38,753 38,399 44,241 49,308 47,077 54,936 79,127 78,095 138,413 147,791 78,193

1,668 2,332 3,998 5,183 5,206 4,581 4,178 5,078 5,137 2,163 3,895 3,788 554 3,203 2,473 4,624 3,966 6,076 8,590 7,376 1,387

1,076 1,728 538 2,051 1,667 7,828 6,213 10,460 11,368 14,776 24,587 61,924 23,776 9,682 13,624 34,032 33,618 45,054 54,365 59,614 48,449

67,736 47,915 22,004 17,600 41,108 45,095 57,800 86,520 105,590 178,200 301,020 321,270 167,020 84,370 63,750 145,970 112,640 243,150 271,210 328,330 134,710

30,379 33,046 16,022 15,030 14,457 9,253 21,730 27,390 37,380 74,650 87,830 122,160 53,840 25,530 27,610 57,330 177,410 154,120 202,070 93,510 72,920

Source: International Financial Statistics, IMF

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Foreign Direct Investment Classified by Economic Groups

(Million Dollars) Economic Group FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10

Food Beverages Tobacco & Cigarettes Sugar Textiles Rubber & Rubber Products Paper & Pulp Leather & Leather Products Chemicals Petro Chemicals Petroleum Refining Mining & Quarrying Oil & Gas Explorations

7.6 -13.6 0.9 0.1 18.4

6 1 0.9 26.1

3.3 0.7 0.5 0.4 35.4

10 6.2 6.7 4.2 39.3

53.3 6.2 2.5 5.1 47

37.5 88.8 389.5 16.2 59.4

49.6 -1.7 9.2 9.4 30.1

149.7 29.6 1.4 14.7 36.9

87.4 1.6 14.2 5 27.8

0.2 0.7

1.4

1.7

4.7 0.1

4.3 1.2

3.7 1.1

1.7 0

1.9 80.7

0.5 10.6 2.2 2.8 6.6

1.2 86.2 0.8 2.2 1.4

3.5 15.3 1.5 70.9 1.1

6.5 51 1.1 23.7 0.5

3.5 62.9 9.5 31.2 7.1

3 46.2 6.3 155.2 23.7

1.8 79.1 27.4 74.5 42.3

4 74.2 25.1 132.1 13.6

4.8 112.1 8.9 104.5 11.5

268.2

186.8

202.4

193.8

312.7

545.1

635

775

740.6

Pharmaceuticals & OTC Products Fertilizer Cosmetics Cement Ceramics Basic Metal Metal Products Machinery other than Electrical Electrical Machinery Electronics

7.2 0.4 0.3

6.2 0.1 -0.4 0.1 0.1

13.2 1.9 0.1 0.1 1.3

38 3.5 1.1 13.1 0.4 2.1

34.5 -107.6 0.8 39 0.4 3.1 4

38.4 3.9 0.5 33.7 0.4 5.3 7.8

46.2 0 0.1 102.5 1.2 1 15.4

30.4 0 1.4 32.6 1.3 4.3 9.3

5.4 6.8 0.5 -1.2 2 7.1 12.3

0.1 10.5 15.9

0.4 10.5 6.7

0.7 8.7 7.5

2.8 3.4 10.3

1.2 1.7 18.1

4 3.4 18.6

5.9 18.3 27.6

2.5 15.6 22.6

1.2 14.7 23.4

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Transport Equipment (Automobiles) Power Construction Trade Transport Tourism Storage Facilities Communications Financial Business Social Services Personal Services Others Total

1.1 36.4 12.8 34.2 21.4 0.1 12.7 3.5 2 8.3 12.6 484.7

0.6 32.8 17.6 39.1 87.4 0.1 2.4 24.3 207.5 0.3 19.4 28.8 798

3.3 -14.2 32 35.6 8.8 0.1 221.9 242.1 0.9 15.5 33.2 949.4

33.1 73.3 42.7 52.1 10.6 3.7 517.6 269.4 1.1 23.5 78.8 1,524.00

33.1 320.6 89.5 118 18.4 3.4 0.2 1,937.70 329.2 3.1 61.6 65.5 3,521.00

50.4 204.6 157.1 173.4 18.8 30.2 18.3 1,898.70 930.1 4.3 84.1 76.9 5,139.60

111.5 70.3 89 175.9 74.2 6.6 0.6 1,626.80 1,865.00 14.3 94.7 101.3 5,409.80

82.5 130.6 93.4 166.5 93.2 0 0.4 879.1 707.4 1.5 100 87.1 3,719.80

33.2 -101.7 101.6 117 132 0 0 291 163 1.9 62.5 127.6 2,201.30

Source: Statistics & DWH Department, SBP

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Foreign Direct Investment Flows

(Million Dollars) FDI per Year FY50 FY51 FY52 FY53 FY54 FY55 FY56 FY57 FY58 FY59 FY60 FY61 FY62 FY63 FY64 FY65 FY66 FY67 FY68 FY69 FY70 FY71 FY72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 FDI 1.2 1.7 4.1 5.9 6.8 7.3 1.8 4.5 5.9 2.2 3 5 2.3 -0.6 2.5 37.1 3.9 49.5 -1.4 59 72.4 90.1 8.1 -0.5 -6.3 14.9 22.5 10.7 35.5 36 28 FDI as % of GDP 0.04 0.05 0.12 0.18 0.2 0.21 0.09 0.15 0.18 0.07 0.08 0.12 0.05 0.01 0.05 0.61 0.06 0.66 0.02 0.7 0.72 0.03 0.02 0.13 0.09 0.08 0.07 0.2 0.19 0.12 0.13 Capita ($) 0.03 0.05 0.11 0.16 0.17 0.18 0.04 0.11 0.14 0.05 0.07 0.11 0.05 0.01 0.05 0.72 0.07 0.9 0.02 1.02 1.21 0.07 0.03 0.18 0.16 0.16 0.15 0.49 0.48 0.37 0.44 Source: Statistics & DWH Department, SBP Year FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FDI 35 98 42.1 48 70.3 145.2 108 162.2 209 216.2 246 335.1 306.4 354.1 442.4 1101.7 682.1 601.3 472.3 469.9 322.5 484.7 798 949.4 1,524.00 3,521.00 5,139.60 5,410.20 3,719.90 2,205.70 FDI as % of GDP 0.3 0.15 0.15 0.23 0.46 0.32 0.42 0.53 0.54 0.54 0.69 0.6 0.68 0.73 1.74 1.1 0.97 0.75 0.77 0.55 0.82 1.17 0.98 0.97 1.39 2.94 3.78 3.41 2.42 1.33 FDI per Capita ($) 1.2 0.5 0.56 0.79 1.58 1.14 1.66 2.08 2.08 2.27 2.99 2.69 3.02 3.66 8.85 5.48 4.82 3.62 3.52 2.37 3.48 5.59 5.22 6.34 9.99 22.66 32.5 33.61 22.72 13.22

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REFERENCES:
TREND OF FOREIGN DIRECT INVESTMENT IN PAKISTAN (Muhammad Azam, Naeem-urRehman Khattack: The Islamia University Bahawalpur, March 2001) FOREIGN DIRECT INVESTMENT AND ITS IMPACT ON TRADE AND GROWTH IN PAKISTAN (Nazir Saeed: JOURNAL OF MANAGERIAL SCIENCES, VOL.III, NO.II, 2005) FOREIGN DIRECT INVESTMENT INFLOWS IN PAKISTAN (Minh Hang Le, Ali Ataullah: THE JOURNAL OF ECONOMICS, VOL.VII, NO.I, 2001) FOREIGN DIRECT INVESTMENT IN PAKISTAN: POLICY ISSUES AND OPERATIONAL IMPLICATIONS (Ashfaque H. Khan, Yun-Hwan Kim: EDRC REORT, SERIES NO.68, July 1999) FOREIGN DIRECT INVESTMENT, EXPORTS AND DOMESTIC OUTPUT IN PAKISTAN (Ahmad.M.H, Alam S. And Butt M.S: THE PAKISTAN DEVELOMENT REVIEW 42, 2003) FOREIGN DIRECT INVESTMENT IN PAKISTAN: POLICIES AND TRENDS (Ashfaque H. Khan: THE PAKISTAN DEVELOMENT REVIEW 36, 1997)

Economic Survey of Pakistan, 2011 Federal Bureau of Statistics (FBS) Business Recorder Economic & Business review, DAWN Pakistan Research Repository Handbook of Statistics on Pakistan Economy 2010 www.google.com www.statpak.gov.pk www.sbp.org.pk www.pide.org.pk www.bizresearchpapers.com www.lahoreschoolofeconomics.edu.pk www.findarticles.com www.web.worldbank.org. www.hec.gov.pk www.adb.org www.qurtuba.edu.pk

Research Report on Foreign Direct Investment in Pakistan