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Case: Telecom Sector of Pakistan
Marks: 05 marks
Due Date: August 07, 2014
Foreign Direct Investment plays a vital role in country’s economic growth, especially in its impact on transmission of technology and development in management and marketing strategies. FDI can be in three forms; establishing new branch, acquiring control share of an existing firm, and participating jointly in a domestic firm. As the Pakistani economy have drastic swings over the period of time due to unstable political condition and instability in implementing the sustainable economic policy. But in 1999, there was huge FDI observed by the economists, and surprisingly during the politically instable circumstances, Army was taking control of public houses and democratic government had gone. Critics said that Political stability is more important than kind of governance i.e. democracy or dictatorship. In 2003-2004, the total percentage share of telecom FDI in total FDI was 21.81%. This huge amount of money grabbed attention of investors around the world. But with the passage of time, FDI in telecom industry went down. Some critics say that it’s because of the market saturation, as so many companies invested huge amount of money in Pakistani market and opportunities of new entrants became squeezing.
In your opinion, which critical comment is more valid and why, supports your answer with logical points and arguments?
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tomorow is last date discuss the gdb
lo samaj he nahy a rahe , pocha kya ha aus nay . kiss point ke bat kar rha ha wo.i think so PEST analysics kr do just
just idea don't copy past please discuss
The higher level of saving and investment is necessary to increase the rate of capital formation. However, in developing countries the level of domestic savings falls below the desired level because of low per capita income. In the case of Pakistan, domestic savings account for less than 20 percent of the GDP.
This gap between domestic savings and desired level of investment can be filled by the transfer of resources from outside. FDI is one of the most important sources. To increase the level of foreign capital inflows, liberalization of trade and investment regime by relaxing controls and offering financial and trade incentives like tax concessions and tariff reductions should be needed. Furthermore, host country should pursue active liberalization policies to overcome trade deficit, and encourage investment in export-led sectors. To ensure that FDI stimulates domestic economic activity, the host country should make it mandatory for the foreign investor to use a certain amount of locally made inputs in the production of final goods. The domestic policies opted by the host countries have an important influence on the decisions of foreign investment. To attract FDI, the host country should adopt concrete and investor friendly policies, strong infrastructure are the pre-conditions to restore the confidence of foreign investors.
i think we have to give valid reasons of declining fdI in Pakistan
raheele u r right . mere b yahe khyal tha ,because case main yahe point focus kiya gay ha, phaly FDI aye phr slow slow less ho gaye ha, or ais kay ilwa market potential be to hota ha ne ,iak portfolio main katne investment ho sakte ha. aj say 10 sal phlay ya sab sompanies aye the or investment ke de ab kon se investment aye ge , market potential b to full ho gya ga , ab zaida say zaida 1 ya 2 more companies ajay ge