What Is The Impact Of Foreign Direct Investment On Economic Growth Of South Asian Developing Countries?

Foreign direct investment is the most significant source of investors send money to Pakistan. For developing countries like Pakistan, foreign direct investment (FDI) is important. It is critical for industrial growth because it offers a rare blend of long-term financing, technology, training, technological know-how, managerial skills, and marketing experience.

When an investor makes a direct investment through online money transfer to Pakistan or another country, he or she takes part in the control and management of a business enterprise located outside of the investor’s country. Plants are built by foreign companies to supply the host country’s market and the markets of the host country’s neighbors. For the sake of supply chain management, foreign companies may also invest in other countries. Manufacturing firms want to be able to monitor the movement of products from manufacturers to consumers through value-adding processes and distribution networks.

What Is The Importance Of Foreign Direct Investment For Any Country?

At this time, investment through money transfers to Pakistan from abroad continues to be a major factor in any country’s economic growth. In particular, in developing countries, foreign direct investment (FDI) is the primary driver of economic development. Globalization has aided in the promotion of deep economic integration between countries over the last few decades. Developing countries have altered their economic policies by removing barriers to international trade and investment. As a result, developing countries are in fierce competition to draw FDI.

FDI benefits developing countries like Pakistan in a variety of ways. First, it provides capital to generate positive externalities in the region, such as job creation, technology transfer, managerial skills, productivity gains, research and development, and new production methods. Second, domestic investors are encouraged to invest in the country. Despite various political and economic challenges, Pakistan is currently on the radar of international investors. Pakistan has implemented investment-friendly policies in order to attract foreign investors.

What Are The Major Investment Sectors In Pakistan For Foreign Investors?

China, the United States, Japan, Norway, the United Kingdom, Hong Kong, Saudi Arabia, and Switzerland are among the countries that invest in Pakistan. The power and energy industry, financial services, trade, manufacturing, transportation, textiles, and trade are all FDI target industries. Pakistan’s power and energy sector (PESP) is one of the largest recipients of foreign direct investment. The Pakistani government recently announced a new power policy and provided various incentives to encourage domestic and foreign investors to invest in the power and energy sectors. Pakistani diasporas mainly send money to Pakistan online to invest in the real estate sector.