National Management College Senior Management Wing, Lahore

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National Management CollegeSenior Management
Wing, Lahore

• Event
• 7th Senior Management Course
• Target Audience
• Senior Officers within the promotion zone of
  BPS-20
• Topic
• Foreign Direct Investment in Pakistan
• Policy, Its Impact and Challenges
• Speaker
• Prof. Dr. Khawaja Amjad Saeed,
• Professor Emeritus Principal,
• Hailey College of Banking Finance,
• University of the Punjab,
• LAHORE.
• Email kamjadsaeed_at_yahoo.com
• Web www.kamjadsaeed.edu.pk
• Venue
• Executive Development Institute Hall, (DMG)
  Campus, Lahore

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Presentation Framework A. FDI Global
AspectsB. FDI PakistanC. FDI Way Forward
for Pakistan
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• Rationale
• FDI Inretrospect
• FDI Host Countrys Determinants
• FDI Types
• FDI Methods
• FDI Incentives
• FDI Rating Dimensions

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A Global Drivers - Globalization - Regional
Setting - WTO RiseB Economic
Drivers 1) Poverty 2) Employment 3) Technolo
gy 4) Good Governance 5) Self
Reliance 6) Main Stream 7) Exports 8) Image
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Decade Yearly Average-------------- -----
---------------- ( b)1970s lt
101980s lt 201990s 179Drivers1) Mer
gers and acquisitions.2) Internationalization of
production in a range of industries.3) 1998 -
636 b4) Source UNCTAD
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1) Potential Stability2) Law and
Order3) Economic Strength4) Government Economic
Policies5) Government Bureaucracy6) Local
Business Environment7) Infrastructure8) Labour
Force9) Quality of Life10) Welcoming attitude.
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1) An individual.2) A group of related
individuals.3) An incorporated / unincorporated
entity.4) A public or private Company.5) A
group of related enterprises.6) A Government
body.7) An estate (law), trust or other social
organizations.8) Any combination of the above.
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1) Incorporating a wholly owned subsidiary or
Company.2) Acquiring shares in an associated
enterprise.3) Through a merger or an
acquisition of an unrelated enterprise.4) Part
icipating in an equity joint venture with
another investor or Enterprise.
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1) Low Corporate Tax and Income Tax Rates2) Tax
Holidays.3) Tax Concessions others4) Preferent
ial Tariffs.5) Special Economic
Zones.6) Investment Financial Subsidies.7) Soft
Loan or Loan Subsidies.8) Free Land or Land
Subsidies.9) Relocation and Expatriation
Subsidies.10) Infrastructure Subsidies.11) R
D Support.12) De-regulation.
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A International Rating Agencies - Around 80
- Famous 1) Standards Poors 2) Moodys 3)
Fitch - Pakistan 1) PACRI 2) Private
one - Ratings - A ----------------(Mathemat
ical Notations) - Trends - Upgrade - Maintai
n - Downgrade - Factors for consideration - C
urrent Account - Fiscal Policies - Inflationar
y Pressures
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B Economic Freedom Index - Pakistan 110 - In
dia 121 - Pakistan rated betterC Opacity
Index- Developed by Price Waterhousecooper in UK
on requirement of 35 stakeholders.D World
Bank - Rich in human capital - Infrastructure -
Corridor - Gwadar - Growth - Government
Plans needed - Water - Energy - Food
Security - HRD - Infrastructure
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1. PEST Formula2. FDI Pakistan-Foreign
Investment3. FDI Pakistan Countrywise
Inflows 4. FDI Avenues 5. Infrastructure
Physical 6. Power Sector7. Board of
Investment (BOI)8. China Factor9. Korean
Factor
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B.1 PEST FORMULA
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B.2 FDI
Pakistan Foreign Investment
Million__________________________________________
____________________ Year

FDI
--------------------------------------------------
-------------- Greenfield Privatization
Total__________
___________________________________________
1990s

486(A) (Annual Average)

2,000(T)_____________________________
__________________________________2001 - 02
357 128 4852002 - 03
622 176 7982003 -
04 750
199 9492004 05
1,161 363 1,5242005
06 1,981
1,540 3,5212006 07
4,873 .266
5,1392007 08
5,020 1.33 5,1532008 09
3,720 -
3,720July Jan 2010
1,176 -
1,176_____________ _______
_______ ________
19,660 2,805
22,465Percentage 88 12
100____________________________________________
_________________Source
Expcerted from BOL website on March 11, 2010.
www.pakboi.gov.pk/foreig
n-invest.htm
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B.3 FDI Pakistan1) Country Wise FDI
Inflows1) USA2) UK3) UAE4) Japan5) Hong
Kong6) Switzerland7) Saudi Arabia8) Germany9)
Korea, Republic10) Norway11) China (
2006 07 high, Now negative ) __________________
_________________________________________Source
BOI, Pakistan Economy Foreign Investment,
P.2, downloaded on March 03, 2010
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B.4 FDI Avenues1) Power2) Tra
de Policy3) Oil and Gas4) Construction5) Ser
vices6) Infrastructure
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B.5 Infrastructure - Physical1) Aviat
ion2) Ports3) Highways4) Roads5) Bridges6) Ur
ban Mass Transfer7) Water Supply
Sanitation8) Departmental Stores9) Housing10) D
esalination
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B.6 Power SectorA Needed - Cheap - Abundan
t - Environmental FriendlyB Electricity
Use 1) Households 43 2) Industry 28
3) Agriculture 12 83 4) Commerce
07 5) Others 10 100
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C Installed Generation of Electricity Capacity
1) WAPDA 58 ( Hydel 58, Thermal
42 ) 2) IPPs 30 3) KESC 09
4) Nuclear 03 -----
100 Issues1) Untapped Hydel Potential
58,000 MW2) Line Losses3) Solar
4) Wind5) Austerity
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B.7 Board of Investment (BOI)A Internatio
nal Experiences- Singapore- KoreaB Supportive
Logistics - Investor Friendly- Liberal
Policy- Good Governance- Investor
Facilitation- Confidence of Investors- Instituti
onal Arrangements- Other aspects
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B.8 China Factor ( March 2006 )-
12 b- Composition 1) Islamabad International
Airport 2) Oil Refinery - Gwader 60,000
barrels of oil per day 3) Bunji Hydro Power
Project 4) Neelum Jhelum Hydro Power
Project- FTA- Special Economic Zone in Punjab
5 Years Trade 20 b
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B.9 Korean Factor- Industrial Estate for
high Technology Management in Lahore.- 60
Korean Firms.- Value addition.- Latest
Technology
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1) Investor Confidence - Address2) Asian
Investors - Target3) Existing
Investors - Expand4) Public Investment - Sustai
n5) Environment - Friendly6) Infrastructure -
Support Supply
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(No Transcript)