Infrastructure development, CPEC and FDI in Pakistan: is there any connection?

Abstract

A sharp decline in the inflow of foreign direct investment (FDI), negative growth in exports, deterioration in physical infrastructures and launching ‘China Pakistan Economic Corridor’ are the phenomena which have been interestingly observed by the policy makers and economists. This study covers these aspects jointly and examines that how these phenomena are interact to each other. This study tests the impact of China Pakistan Economic Corridor (CPEC) on the patterns of FDI in Pakistan economy. The limitations in terms of the scope of this study do not allow us to estimate the return and to highlight possible difficulties and risk factors for the investors. However, these can be assessed in the more specific studies for each project. Those investable projects may be belonged to the macro financing in energy, railways, air transport, ports, highways and construction industries. Such studies are also required for these sectors to complete the chain of development process.

Keywords:

• Foreign direct investment
• Pakistan
• China
• infrastructure
• development

Note

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 For more information, please consult the World Bank’s Infrastructure Strategy Update FY2015-2015. www.worldbank.org/infrustructure.