Transcript FDI in Africa: Constraints

Determinants of Foreign Direct
Investment in Landlocked and
Least Developed CountriesAnalysis with a focus to Malawi
Background and Introduction
• Capitalism is both a Political and Economic
Process
• Economic Intergration into the world is an
extremely important aspect of economic
transformation
• FDI plays a Crucial role in terms of Fostering
Economic Growth
• Most LDC’s and Landlocked Countries are still
struggling ( World Bank 2008 doing Business)
A case of Malawi-Background
Malawi is a landlocked LDC situated in the
southern part of Africa
Currently the country is enjoying a growing
economic and stable Political environment
which is conducive for Doing Business;
The current Government has also reviewed
its Investment Policy and Trade Policies for
economic Development;
However, the recent survey of the World
Bank of 2008 has seen Malawi going ten
steps lower in doing business and ranking 3rd
from Last, indicating that its not doing a a lot
in its climate for doing business
FDI AND DEVELOPMENT
Positive
• Accelerates Growth
• Creates new Market
• Technical Innovation
• Enterprise Restructuring
• Creates Employment
• Improves Living Standards
Negative
• Bad policies, drain in the countries economy
Significance of the study
The study is going to help point out the
necessity of using research information to
create an attractive Investment climate. In
particular :
To see What Determines FDI in Least
Developed Countries that are Landlocked
To see how they can benefit from Trade
Liberalization in terms of FDI flow;
To see how improved Infrastructure with
special reference to in Transport and Energy
can help FDI;
To see How they can benefit from Aid for
Trade .
Other Studies done
There are other studies that have been done and the
following determinants have been pointed out
Trade Liberalization can increase
FDI
Hypothesis
Good Infrastructure in particular
Transport and Energy can help
bring FDI;
Aid for Trade is critical for
Economic development.
How to come up with country
determinants
Rigorous Econometric Model of FDI -Regression analysis .
It provides evidence for great importance and Positive
impact on FDI stock of GDP and access to common market
Analysis will be based on data containing information on
FDI stock in 16 LDCS that are landlocked over the period of
2002 to 2006
Data Collection will be done through with Private Sector,
Government Officials and Civil Societies
Budget
The total cost of this research for each country will include
the following ( The study intends to compare 15
countries, 5 in Africa,5 in Asia 5 in Europe and Latin
America):
US$
Travel Cost:
10,000
Cost of accommodation
10,000
Communication Cost
5,000
Stationery
5,000
Fees for Research Assistance
6,000
Other Miscellaneous
2,000
Plan for project administration and
utilization of resources
The study will be done with Host Governments Officials
responsible for Investment Promotion in Order to get
ownership
Workshops will be done in the host countries in order to
get involvements and support from all key stakeholders;
Follow-up workshops on recommendations will be done
in order to make sure that FDI has started flowing in the
country.
Proposal summary
How I will present my proposal to relevant authorities,
communities and funding agencies