Determinants of Foreign Direct Investment in Landlocked and Least Developed Countries-

Analysis 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-BackgroundMalawi is a landlocked LDC situated in the

southern part of AfricaCurrently 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 StandardsNegative• Bad policies, drain in the countries economy

Significance of the studyThe 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 LandlockedTo 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 Other Studies done

There are other studies that have been done and the

following determinants have been pointed out

Hypothesis

Trade Liberalization can increase FDI

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 How to come up with country determinantsdeterminants

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 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 Plan for project administration and utilization of resourcesutilization 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 summaryProposal summary

How I will present my proposal to relevant authorities, communities and funding agencies