Inward and Outward FDI in Pakistan

Group Members:

Khalil Ullah 118Muhammad Fazeel Khan 128Muhammad Nayab Gul 131Sajid Hameed 144

Presented In:

The Islamia University of Bahawalpur, Pakistan

Foreign Direct Investment

Foreign direct investment (FDI) or foreign investment refers to long term participation by country A into country B. It usually involves participation in management, joint-venture, transfer of technology and expertise. 

Types of FDI

Inward Foreign Direct Investment

Inward FDI for an economy can be defined as the capital provided from a foreign direct investor (i.e. the coca cola company) residing in a country, to that economy, which is residing in another country.

“ Foreign direct investment by a foreign firm establishing a facility within the domestic country. Contrasts with outward FDI. ”

EXAMPLE: General Motors decides to open a factory in Malaysia. They are going to need some capital. That capital is inward FDI for Malaysia.

 

Types of FDI .

Outward Foreign Direct Investment

Foreign direct investment by a domestic firm establishing a facility abroad. Contrasts with inward FDI.

EXAMPLE: General Motors decides to open a factory in Malaysia. They are going to need some capital. That capital is outward FDI for USA.

 

5 Key Reasons To Invest In Pakistan

Geo-strategic Location

Trained Workforce

Economic Outlook

Investment Policies

Financial Markets

Foreign Investment Inflows In Pakistan ($ Million)

Year Green FieldInvestment

PrivatizationProceeds

Total FDI 

2005-06 1,981.00 1,540.00 3,521.00

2006-07 4,873.20 266.40 5,139.60

2007-08 5,276.60 133.20 5,409.80

2008-09 3,719.90 0.00 3,719.90

2009-10 2,150.80 0.00 2,150.80

2010-11 (Jul-Jan) 947.00 0.00 1,181.80

Green Field Investment

A form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees. 

Privatization Proceeds

Selling off public assets to private operators can create a win-win situation for developing countries looking to unload expensive and unsustainable assets

Main Greenfield Projects, Inward Investing In Pakistan

Investing company Home Economy Industry Investment value (US $)

China Mobile China Communications 500

Total France Petroleum 406

Yamaha Japan Transport Equipment 150

Metro Germany Trade 55

Coca-Cola U.S. Beverages 100

Procter & Gamble U.S. Chemicals 100

Toyota Motor Japan Transport Equipment 180

Credit Suisse Group Switzerland Finance 33

Country Wise FDI Inflows ($ Million)

2010-2011Jul-Jan

USA 142.9UK 127.6U.A.E 158.3Japan 1.1Hong Kong 91.8Switzerland 23.3Saudi Arabia 5.9Germany 9.1Korea (South) 1.5Norway 0.4China 4.9Others 380.2

Sector 2010-2011(Jul-Jan)

Oil & Gas 296.4Financial Business 114.1Textiles 14.0Trade 27.6Construction 37.5Power 86.4Chemical 19.5Transport 54.7IT & Telecom 77.3Others 219.5

Sector Wise FDI Inflows ($ Million)

Foreign Direct Investment, Net Inflows

Foreign Direct Investment, Net Inflows (South Asia)

Foreign Direct Investment, Net Inflows (Developed Countries)

Foreign Direct Investment, Net Outflows

Pakistani companies are operating in ;

UK Singapore Malaysia UAE Saudi Arabia USA Qatar

Foreign Direct Investment, Net Outflows

• 6,000 Pakistani companies operating in the UAE e.g. Netsol’s (a Pakistani software company).

• Pakistanis have invested 6.7B Dirham's in Dubai real estate.

• Fosh Tech dealing in electronic field in Singapore.

• Most banks invest in many countries such as HBL.